NYSE American’s request follows Nasdaq’s proposal to the SEC, seeking approval for options trading on the BlackRock iShares Ethereum Trust (ETHA).
On Wednesday, August 7, the New York Stock Exchange (NYSE) American LLC proposed a rule change allowing them to list and trade options for three Ethereum exchange-traded-funds (ETFs) operated by asset managers Bitwise and Grayscale.
In the filing, the NYSE American requested the SEC to permit options trading for the Grayscale Ethereum Trust (ETHE), the Grayscale Ethereum Mini (ETH), as well as the Bitwise Ethereum ETF (ETHW).
NYSE American noted that such an approval would benefit investors by providing a low-cost investment tool to gain additional exposure to the ETH asset class. Furthermore, the filing noted that the options trading on Ether ETFs provides a hedging mechanism in order to meet the investment requirements for ETH products and positions.
The SEC is likely to submit its comments on the proposal in the next 21 days. Also, the request for the rule change by NYSE American would be only applicable to Bitwise and Grayscale. NYSE American’s request follows Nasdaq’s proposal to the SEC, seeking approval for options trading on the BlackRock iShares Ethereum Trust (ETHA).
Similar to NYSE American’s proposed rule change, Nasdaq’s August 6 request for ETH ETF options applies exclusively to BlackRock’s fund, currently the only Ether ETF listed on the Nasdaq.
Options for Ethereum ETFs Can Take A Long Time
While the NYSE and Nasdaq have applied for options on the Ether ETFs, the SEC has yet to approve the authorized options trading on the spot Bitcoin ETFs that arrived earlier this year in January. The US Bitcoin ETFs now have over $50 billion in assets under management.
In July, the SEC informed the six options exchanges that additional time was needed to reach a decision. This includes exchanges like Nasdaq that had requested permission to list options on spot BTC ETFs. Options are commonly used by hedge funds and financial planners to protect against sudden market fluctuations, such as the 28% drop in Ether’s spot price on August 5.
Despite the market volatility this week, the spot Ethereum ETFs have been in strong demand seeing inflows this week. This shows that the institutional interest in ETH remains strong. Thus, the US SEC might consider further derivative products for the newly launched crypto ETFs.
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