SEC Postpones Decision on BlackRock and Bitwise ethereum ETF Options
The U.S. Securities and Exchange Commission (SEC) has delayed its decision on Nasdaq's proposal to list and trade options on BlackRock's iShares ethereum Trust (ETHA). The anticipated decision, originally slated for September 26, has been rescheduled to November 10.
In a recent press release, the SEC highlighted the need for additional time to evaluate the potential impact of such offerings on market stability. This delay underscores the regulatory body's cautious approach when considering new financial products in the evolving digital asset space.
Spot Ether ETF Options to Bring Additional Liquidity to Market
If approved, options for a spot ethereum exchange-traded fund (ETF) could enhance market liquidity and potentially stimulate positive market sentiment. Proponents argue that these options would align with established regulatory standards for ETF-linked derivatives, providing investors with new opportunities to manage ethereum price fluctuations.
The proposal, submitted in July, seeks to amend existing regulations to allow options trading on BlackRock's iShares ethereum Trust. This trust, backed by ethereum held by Coinbase and cash reserves managed by The Bank of New York Mellon, offers a passive investment approach focused solely on ethereum price exposure.
The SEC's decision to postpone the ruling is consistent with its authority under the Securities Exchange Act, allowing for an extended review period to comprehensively assess the risks and benefits associated with new financial products.
Furthermore, the SEC's recent approval of options trading for BlackRock's iShares bitcoin Trust (IBIT) underscores the regulator's commitment to rigorous evaluation of proposed financial instruments to address concerns related to market manipulation and risk management.
In a related development, the SEC has also deferred its decision on a separate proposal from NYSE American LLC concerning options trading for Bitwise's ethereum ETF, the Grayscale ethereum Trust, and the Grayscale ethereum Mini Trust. This delay emphasizes the regulator's thorough examination of all ethereum-related financial products.
The uncertain regulatory environment has coincided with notable fluctuations in the ethereum ETF market, with recent outflows totaling over $79 million. Grayscale's spot Ether ETF (ETHE) experienced significant outflows on Monday, marking the largest single-day withdrawal since the introduction of spot Ether ETFs earlier this year.
Spot bitcoin ETFs Witness Inflows
In contrast, U.S.-based spot bitcoin ETFs have seen consistent inflows, with net deposits exceeding $135.95 million on Tuesday. This marked the fourth consecutive day of positive inflows, with 12 funds attracting over $390 million in total over these four days.
Leading the inflow trend, BlackRock's IBIT received $98.89 million in net deposits, the highest since August 26. Bitwise's BITB and Fidelity's FBTC followed with $17.41 million and $16.80 million in inflows, respectively.
While Ether ETFs rebounded on Tuesday with total daily inflows of $62.51 million after Monday's outflows, BlackRock's ETHA emerged as the top performer, attracting $59.25 million in net deposits. VanEck's ETHV and Invesco's Ether ETF also saw modest gains, with inflows of $1.94 million and $1.32 million, respectively.
In conclusion, the SEC's postponement of the decision on ethereum ETF options reflects the regulatory body's cautious approach towards new financial products. As the digital asset landscape continues to evolve, market participants eagerly await further developments in the regulatory framework governing digital asset investments.
