- Options exchanges have filed for spot Bitcoin ETF options.
- ETF options usually go through a gruelling bureaucratic process before being able to launch.
Now that spot Ethereum exchange-traded funds have launched, investors are turning to the next crypto product that Wall Street could launch — spot Bitcoin ETF options.
Bitcoin ETF options will allow investors to buy or sell Bitcoin for a specific price at a predetermined date just as easily as they purchase options for stocks — without needing to sign up on crypto-specific options platforms like Bybit.
Bloomberg Intelligence ETF analysts Eric Balchunas and James Seyffart estimate that Bitcoin ETF options had a 70% chance of seeing the light of day by the end of the year.
“There’s a whole bunch of ETFs that hold derivatives of Bitcoin. Covered call Bitcoin, leveraged Bitcoin, leveraged Ethereum, actively managed ETFs — all of them have options already,” Seyffart explained during a webinar on Wednesday.
“We don’t think the Securities and Exchange Commission is going to deny this,” he added. “There’s pretty much no reason for them to deny this and there’s a lot of demand and interest.”
The problem, Seyffart said, is that the SEC doesn’t have final say. Once the agency has approved the product, it gets kicked back to the Options Clearing Corporation, and ultimately to the Commodity Futures Trading Commission.
And neither the OCC nor the CFTC have deadlines for finishing the process.
ETF options “are a bit like going to the New Jersey department of motor vehicles. You get stuck in there for days,” Balchunas said. “There’s a couple agencies involved. It’s just a pain.”
“I don’t think they’re delayed for any nefarious reason,” he added. “It’s more just governmental, bureaucratic slowness.”
Seyffart pointed out that some gold ETFs — the first of which launched in the 90s — still don’t have options. And some platinum ETFs have been waiting since 2010 to get options approved.
Nevertheless, the two analysts were optimistic about Bitcoin ETF options’ chances.
On Thursday, the Chicago Board Options Exchange withdrew their application for Bitcoin ETF options, and then refiled it again immediately.
Most notably, the new version was 44 pages long, against the original’s 15 pages — a hint that the SEC has likely given feedback to the exchange, Seyffart wrote.
“Just as ‘comments from the SEC’ was a good sign in our ETF approval odds, we think this is good sign here too,” Balchunas posted on X.
“Because if they were just gonna deny outright why bother engaging at all?” he added.
Tom Carreras is a markets correspondent at DL News. Got a tip about Bitcoin ETFs and options? Reach out at tcarreras@dlnews.com