Options on spot Bitcoin exchange-traded funds (ETFs) may not receive regulatory approval in the coming months, Reuters reported on February 1.
Martin Leinweber, digital asset product strategist for MarketVector Indexes, told Reuters that these options could take two to 10 months to be approved. This implies a possible approval date between April and December 2024.
This is because options may require approval from two regulators. Spot Bitcoin ETFs only required approval from the U.S. Securities and Exchange Commission (SEC) before their launch in January. However, options on these ETFs may require approval from both the SEC and the Commodity Futures Trading Commission (CFTC). Leinweber explained that the need for dual approval “adds a layer of complexity and potential for… regulatory issues.”
According to Reuters’ sources, the delays are ongoing and there is no established regulatory process. An unnamed source said the CFTC is currently investigating issues related to jurisdiction and supervision. Another said exchange executives plan to meet with the CFTC in the near future.
Cboe, one of three exchanges seeking to list the options, supports a timeline of months. The website says it expects to list the options later in 2024.
Other experts anticipate an earlier decision
A longer approval timeline deviates from previous expectations. Bloomberg ETF analyst James Seyffart previously suggested the SEC could make a decision on spot Bitcoin ETF options as early as February. no later than September. He also suggested that the SEC had recognized some filings relatively quickly.
Seyffart made the statement when the SEC opened comment on certain filings on January 19. His estimate apparently did not take into account the CFTC’s potential involvement in approvals, as detailed today by Reuters.
Either way, the SEC just needs to make a decision. Is not required to approve proposals and may issue a rejection instead.
Options would give investors a new way to access spot Bitcoin ETFs. By investing in options, investors could participate in leveraged trading and potentially earn higher returns, albeit with greater risk.