Several industry insiders have indicated that the approval of options products for the new US Bitcoin spot ETF may take several months, potentially diminishing the appeal of the underlying product.
The delay in the options products for Bitcoin spot ETFs is attributed to the absence of established regulatory procedures to approve them. According to sources, the US SEC, responsible for overseeing the required technical rule changes for exchanges to launch options products, usually approves them several days after the ETF starts trading. However, as regulatory authorities classify Bitcoin as a commodity, options products for Bitcoin spot ETFs may also need approval from the Commodity Futures Trading Commission (CFTC).
An insider revealed that products associated with Bitcoin spot ETFs could raise jurisdictional and regulatory issues, and the CFTC is still addressing these concerns. MarketVector Indexes Digital Asset Product Strategist Martin Leinweber stated, “This dual regulatory involvement adds complexity, and some might call it regulatory friction.” He anticipates the approval process may take between two to ten months. MarketVector Indexes provides benchmark data for VanEck's Bitcoin spot ETF.
Another insider disclosed that some executives from exchanges are set to meet with CFTC officials soon to discuss this matter.
Institutional investors often use options for risk hedging. Analysts suggest that large investors could potentially channel up to $100 billion into ETFs, and without options products, these investors might face risk management challenges. Yesha Yadav, a law professor at Vanderbilt University, stated that this might lead some to “stay completely away” from these ETF products.
Earlier reports indicated that the US SEC received applications for BTC ETF options trading from Nasdaq and Cboe on January 19. Nasdaq applied for rule changes to allow it to list and trade options on BlackRock's iShares Bitcoin Trust. Cboe applied to list and trade options related to “holding Bitcoin ETPs (Exchange-Traded Products).”