The Cboe BZX Exchange proposes Rule 19.3 amendment to list Ethereum ETF options, as spot ETF trading volume hits record $1.5B amid growing institutional demand.
By Godfrey Benjamin
Edited by Marco T. Lanz
Updated
3 mins read
The Cboe BZX Exchange seeks approval to list and trade options on spot Ethereum ETH $1 931 24h volatility: 4.5% Market cap: $233.13 B Vol. 24h: $14.14 B exchange-traded funds (ETFs).
This move mirrors the launch of Bitcoin BTC $84 329 24h volatility: 4.4% Market cap: $1.67 T Vol. 24h: $31.68 B ETF options in late 2024, signaling a rise in institutional interest. This latest move highlights the growing demand for Ethereum-based investment products.
The proposal, filed as an amendment to Rule 19.3, directly responds to a similar request made by NYSE American. Notably, this filing is still under review by the US Securities and Exchange Commission (SEC).
If approved, options trading on Ethereum ETFs could provide investors with enhanced new tools for exposure, hedging, and speculation. It would also contribute to the maturation of the broader crypto market.
At the core of Cboe’s filing is a request to expand Rule 19.3. This Rule permits options trading on fund shares tied to specific asset classes. This includes financial instruments, money market assets, commodities like gold and silver, and Bitcoin ETFs.
Ethereum-based funds, Cboe argues, function in a similar manner and should be granted the same regulatory treatment. The filing explicitly references several key Ethereum ETFs as an underlying asset.
These include the Bitwise Ethereum ETF, Grayscale Ethereum Trust, Grayscale Ethereum Mini Trust, and any trust holding ETH. Cboe asserted that introducing Ethereum ETF options could significantly reshape the landscape for institutional and retail investors.
It would give investors a lower-cost, flexible instrument for gaining exposure to Ethereum’s price movements. At the same time, it is a valuable tool for hedging and managing portfolio risks.
This is because options and derivatives play a critical role in financial markets, offering liquidity, enabling price discovery, and mitigating volatility.
When Bitcoin ETF options launched in November 2024, they provided institutional investors with a structured way to engage with the asset without direct exposure to spot BTC. Coinspeaker reported that these digital investment options amassed nearly $2 billion in notional exposure on their first day.
Ethereum ETF options are expected to do the same, potentially easing ETH price swings as market liquidity deepens. However, it is essential to note that early adoption phases often come with heightened volatility as traders navigate price discovery.
Last December, a crypto derivatives expert, Gordon Grant, noted that Bitcoin ETF options initially faced significant turbulence before stabilizing. So, Ethereum’s journey is likely to follow a similar trajectory.
Ethereum ETFs have demonstrated impressive market demand even before the introduction of options trading. On Monday, trading volume for the nine spot Ethereum ETFs surged to $1.5 billion. This surpassed the previous record of $1.22 billion set on December 19, 2024.
Notably, this increased activity suggests that investors are eager for new Ethereum-based financial products. The arrival of ETF options could further fuel market participation by offering sophisticated hedging and trading strategies.
While Cboe’s proposal represents a significant step toward Ethereum ETF options, it still requires approval from the SEC. This regulatory body has historically taken a cautious approach to crypto-related financial products.
With NYSE American’s similar proposal already pending, the SEC’s decision could set a precedent for the broader integration of Ethereum-based derivatives into mainstream financial markets.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
