Grayscale CEO Michael Sonnenshein has made a compelling case for regulators to approve spot Bitcoin exchange-traded fund (ETF) options. In a statement on Feb. 5, Sonnenshein emphasized the need for a robust listed options market for spot Bitcoin ETFs. He pointed out that while Grayscale Bitcoin Trust (GBTC) has been available in the public market since 2015, it has not been accompanied by listed options due to their absence from the OTC market.
Sonnenshein also highlighted the importance of treating similar products equally. He argued that just as bitcoin futures ETFs and spot bitcoin ETFs are now treated the same, listed options on these products should receive the same treatment as well. To support his viewpoint, he mentioned that the New York Stock Exchange (NYSE) and other national securities exchanges have filed applications for options trading on commodity-based ETFs, including Grayscale’s GBTC fund. The SEC now needs to consider these applications.
One of Sonnenshein’s key arguments in favor of spot Bitcoin ETF options is that they are beneficial for investors. He outlined several advantages, including price discovery, improved navigation of market conditions, and income generation. These benefits are applicable to both retail investors and institutional investors. If approved, options trading on spot Bitcoin ETFs could provide investors with new opportunities and avenues for growth.
The U.S. Securities and Exchange Commission (SEC) is currently reviewing various spot Bitcoin ETF applications. The agency recently opened comments on BlackRock’s Nasdaq-listed fund and several Cboe BZX-listed funds. The timeline for a decision is uncertain, with speculations ranging from February to September 2024. However, it’s important to note that the approval process for spot Bitcoin ETF options is expected to be longer and more involved than the process for underlying funds.
Grayscale was among the firms that gained approval for underlying spot Bitcoin ETFs on Jan. 10. The conversion of Grayscale’s GBTC ETF from an existing fund now makes it the largest spot Bitcoin ETF, with $20.5 billion in assets under management (AUM) as of Feb. 2. However, it’s worth noting that the fund also experiences significant outflows. As the SEC and other regulatory bodies continue to deliberate on the approval of spot Bitcoin ETF options, the future of these investment products remains uncertain.
Michael Sonnenshein’s call for the approval of spot Bitcoin ETF options highlights the need for a robust market and equal treatment of similar products. The potential benefits for investors, including price discovery and income generation, cannot be ignored. While the approval process may take time, the outcome of these deliberations will shape the future of spot Bitcoin ETFs and their impact on the cryptocurrency market.
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