The US Securities and Exchange Commission (SEC) blocked the launch of Spot Bitcoin ETFs for years. Now some issuers of Bitcoin ETFs are trying to make it possible to also open options trading for their ETFs. The SEC does not want to start doing that yet for unclear reasons, as it turned out yesterday.
All the SEC document says is that they need more time.
Need more time?
However, you may wonder why the SEC would need more time to launch options trading in Spot Bitcoin ETFs. Options are not very exciting.
In fact, options make it possible to work on the market with a kind of leverage.
If you think the Bitcoin price will rise, you can pay a premium for a call option. You then pay a little extra to buy 1 Bitcoin at the current rate, for example, in 30 days.
Will the price be higher in 30 days? Then your option is worth money. Is the price lower or at the same level? Then the option is worthless.
A call option is therefore especially interesting if you think that the price will rise significantly and you do not have the money to buy at the moment. With a put option you can do the opposite, namely bet on price falls.
No reason to say no
Grayscale previously won a Bitcoin ETF-related lawsuit from the SEC and now seems to be annoyed by the regulator’s attitude again.
In a letter dated February 28, Grayscale CEO Michael Sonnenshein writes that there is no reason to stop options trading in Spot Bitcoin ETFs, especially after the futures and spot ETFs have already been approved.
“The next natural step is the approval of options on Spot Bitcoin ETFs,” Sonnenshein said.
According to Sonnenshein, options are important to create a healthy and robust market. It would give investors additional options to determine their strategies. After all, with an option you can “insure” or hedge certain positions.
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Source: https://newsbit.nl/sec-verwijst-optiehandel-in-spot-bitcoin-etfs-naar-de-prullenbak/
