Grayscale CEO Michael Sonnenshein recently made a public statement urging regulators to approve spot Bitcoin exchange-traded fund (ETF) options. In his statement, he emphasized the importance of developing a robust listed options market for spot Bitcoin ETFs. Sonnenshein argued for equal treatment of similar products, including bitcoin futures ETFs and spot bitcoin ETFs, and highlighted the need for options trading to support investors’ price discovery and generate income.
Sonnenshein emphasized the significance of advocating for the development of a robust listed options market specifically for spot Bitcoin ETFs. While the Grayscale Bitcoin Trust (GBTC) has been in the public market since 2015, it has not been accompanied by listed options due to the absence of this feature in the OTC Market. Sonnenshein called for regulators to approve spot Bitcoin ETF options to ensure parity among different types of investment products and enhance market accessibility.
The CEO of Grayscale also stressed the importance of treating similar products equally. Sonnenshein highlighted the treatment of bitcoin futures ETFs and spot bitcoin ETFs, stating that they should be treated the same way. He argued that listed options on these products should also be treated equally, emphasizing the need for fairness and consistency in regulatory decisions. Sonnenshein commended recent filings by the New York Stock Exchange (NYSE) and other national securities exchanges that seek to allow options trading on commodity-based ETFs, including Grayscale’s GBTC fund.
Sonnenshein pointed out that while Bitcoin futures ETF options were swiftly introduced through an automatic approval process, spot Bitcoin ETF options require a longer approval process similar to the one for each underlying fund. He called attention to the benefits of options for investors, namely supporting price discovery, navigating market conditions, and generating income. Sonnenshein emphasized that these advantages apply to both retail and institutional investors.
The U.S. Securities and Exchange Commission (SEC) is currently reviewing various spot Bitcoin ETF applications. On January 19, the agency opened comments on BlackRock’s Nasdaq-listed fund and several Cboe BZX-listed funds. Bloomberg ETF analyst James Seyffart speculated that a decision on these applications could be reached between February and September 2024. However, separate reports from Reuters suggest that a decision might be delayed until December 2024 due to the potential need for approval from both the SEC and the Commodity Futures Trading Commission (CFTC).
On January 10, the SEC approved various underlying spot Bitcoin ETFs, including Grayscale’s GBTC ETF. Converted from an existing fund, the GBTC ETF currently has approximately $20.5 billion in assets under management (AUM) as of February 2. With such a substantial AUM, it holds the position as the largest spot Bitcoin ETF in the market. However, it is important to note that the GBTC ETF has also experienced significant outflows.
Grayscale CEO Michael Sonnenshein’s call for regulators to approve spot Bitcoin ETF options underscores the importance of developing a robust listed options market for these investment products. He advocates for equal treatment of similar products and highlights the benefits options trading can bring to both retail and institutional investors. As the SEC considers various spot Bitcoin ETF applications, it remains to be seen when a decision will be reached, with potential delays due to the involvement of other regulatory bodies. Nevertheless, the approval of spot Bitcoin ETF options would undoubtedly contribute to the further growth and accessibility of the Bitcoin investment ecosystem.
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