Grayscale CEO Michael Sonnenschein has advocated for the introduction of a listed option less than a month after the U.S. SEC gave the go-ahead to list a spot Bitcoin ETF. It started.
Spot Bitcoin ETF listed options bottleneck
The time has come for the broader crypto ecosystem, and the ETF community in particular, to start considering the development of a spot Bitcoin ETF listing option, according to a Monday post from Cryptocurrency Top.
He said his company’s Bitcoin ETF GBTC Although it has been on the public market for quite some time, it never reached the level of a listed option. However, he linked this shortcoming to the fact that exchange-traded options are not a feature of the over-the-counter (OTC) market.
Options can be described as exchange-traded derivatives that provide the holder with the right to buy or sell an asset. It can be in the form of a stock or, as in the case of this Spot Bitcoin ETF, a product traded on an exchange.
Exchange-traded options are beneficial to both individual traders and institutional investors. First, it is an inexpensive way for traders to increase their purchasing power, and for institutional investors it is an efficient risk-hedging tool. Overall, they help the market to be solid and healthy. It also helps in price discovery and income generation.
Challenges of listed options per regulatory constraints
Although a listed option is not currently available for Spot Bitcoin ETFs, many market observers believe that the lack of an established regulatory process is the product’s main challenge. Typically, the U.S. SEC remains responsible for overseeing any technical rule changes required of exchanges before options can be listed.
This offering began trading in the U.S. on October 19, 2021, with exchange-traded options available the next day, as was the case for the first Bitcoin futures ETF, which began trading in the U.S. several days after the ETF began trading. Must be approved later.
However, Bitcoin is considered a commodity by several market watchdogs, so it must also go through the Commodity Futures Trading Commission (CFTC) to gain approval. Moreover, Bitcoin and jurisdictional issues remain a bitter battle that the CFTC is still trying to navigate.
Despite these unresolved issues, the New York Stock Exchange and other domestic exchanges will allow listing options for commodity-based ETFs like the Spot Bitcoin ETF, according to Sonnenschein’s X post. The company reportedly filed Form 19b-4 to amend its listing standards.
meanwhile, GBTC leads It outperformed the spot Bitcoin ETF market by a wide margin. On trading day 16, Sonnenschein’s spot his Bitcoin ETF hit his $338 million trading volume.BlackRock is closely following suit. And competition is becoming more intense day by day.