Cboe’s Application for Spot Bitcoin ETF Options

Cboe withdrew and re-filed its application to list options on spot Bitcoin exchange-traded funds (ETFs) late Thursday. This move suggests the Securities and Exchange Commission (SEC) might be engaging in the process.

Earlier, Bloomberg Intelligence analyst James Seyfarrt anticipated that options on spot Bitcoin ETFs could be available by Q4. He mentioned that the SEC’s final decision deadline is around September 21, but additional steps from the OCC and CFTC are necessary afterward.

However, shortly after, the Miami International Securities Exchange, MIAX PEARL, and BOX Exchange withdrew their applications to list spot Bitcoin ETF options, as noted in SEC filings.

Seyffart remarked, “Not gonna read much into it for now. The exchange filings that matter are those listing the ETFs — Nasdaq, NYSE, and CBOE.” Fellow analyst Eric Balchunas emphasized that the withdrawing exchanges are smaller, while the larger exchanges still have active applications with a good chance of approval this year.

After Cboe’s withdrawal, Seyffart noted, “There’s definitely some movement” regarding options for spot Bitcoin ETFs. He explained that while the initial withdrawal seems negative, Cboe simultaneously re-filed a new, updated application.

Seyffart pointed out that the new filing proposes a rule change for Cboe to list and trade options on interests from various Bitcoin ETFs such as those by Fidelity, Ark Invest, BlackRock, and others. The previous application, filed in January, was less detailed and only 15 pages long, while the new one includes 44 pages, indicating possible SEC feedback on matters like position limits and market manipulation.

Restarting the Clock

Balchunas noted that comments from the SEC previously indicated a positive trend for ETF approvals, suggesting the current situation could similarly reflect favorably.

However, Seyffart mentioned a potential downside: the new filing might restart the decision clock, likely pushing the deadline to the end of April. Yet, if the SEC engages positively, the deadline may become less critical.

Balchunas added that the timing remains uncertain and updates will follow as new information comes in.

Nate Geraci, President of The ETF Store, highlighted existing crypto derivatives ETFs with options approved while regulators deliberate on trading options for spot Bitcoin ETFs. He called for clarity in the process.

On Wednesday, NYSE American proposed a rule change to list and trade options on Bitwise’s and Grayscale’s spot Ethereum ETFs.