CBOE Reapplies for Spot Bitcoin ETF Options as SEC May Be Engaging

The world’s largest options trading platform Chicago Board Options Exchange (CBOE) has reapplied for Bitcoin ETF options. This move came almost immediately after the exchange withdrew its application.

According to Bloomberg ETF analyst James Seyffart, the United States Securities and Exchange Commission (SEC) could approve the options product on September 21.

We think the #Bitcoin ETF options happen in 4th quarter this year. Final deadline for SEC decision is ~Sept. 21 but there’s more steps needed after that from OCC & CFTC.

Here are some BTC & ETH related ETFs including leveraged that already have options. cc @EricBalchunas https://t.co/xErD5oPiWb pic.twitter.com/USauv6QaFs

— James Seyffart (@JSeyff) August 8, 2024

CBOE Reapplies After Withdrawal

Shortly after CBOE withdrew its application, three smaller exchanges, the Miami International Securities Exchange, MIAX PEARL, and BOX Exchange, followed suit and withdrew their applications for the same options product from the financial regulator. Still, the analyst stated that the withdrawal of these exchanges had a minimal effect on the SEC’s final decision.

Seyffart highlighted that the CBOE’s initial filing was only 15 pages, but the revised application is 44 pages long, adding “a lot more meat to it.” The Bloomberg analyst added that including additional details could suggest that the SEC offered some feedback.

Seyffart pointed out that a downside is that the process could restart, pushing the deadline to approximately April 25 next year. He also noted that if the SEC is actively reviewing the application, the deadline might become less relevant.

While the SEC plays a significant role in the approval of options products, Seyffart revealed that other regulatory bodies, like the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC), will also be involved before investors can access these products.

Unlike spot and futures trading, options trading on spot Bitcoin ETFs allows traders to buy or sell contracts at a predetermined price on a set date. The ETF Institute co-founder Nate Geraci pointed out that while the SEC deliberates on whether to approve the options product, it has also endorsed a list of options on crypto derivatives ETFs, including Bitcoin and Ether products.

Will the SEC Approve?

Whether the SEC will allow the securities exchange to commence options for the spot Bitcoin ETF remains uncertain. Still, comments from Seyffart and Eric Balchunas, another Bloomberg ETF analyst, suggest that the financial watchdog may consider approving or refuting the application either before the end of the year or early next year.

The SEC’s hostile outlook on the crypto industry has recently gradually melted. Two weeks ago, the financial regulator dismissed its claims that crypto assets like SOL, ADA, and eight others are securities. Earlier this week, its four-year-long lawsuit against the global payment company Ripple finally ended with a $125 million civil penalty that Ripple must pay.