US Legislators Push SEC for Bitcoin Options Trading Approval

US Legislators Urge SEC to Approve Bitcoin Options Trading

Reportedly, US legislators are urging the Securities and Exchange Commission (SEC) to greenlight options trading on Bitcoin exchange-traded products (ETPs). As per Axios, Representatives Mike Flood and Wiley Nickel penned a letter to SEC Chair Gary Gensler, advocating an end to discrimination against cryptocurrency funds.

“We urge you, without delay, to approve options on spot Bitcoin ETPs or to provide an explanation for the Commission’s difference in treatment between options for Bitcoin futures ETFs — which are currently trading — and options for the spot Bitcoin ETPs,” stated the bipartisan letter.

Financial instruments known as options grant buyers the right, though not the obligation, to purchase or sell an asset, such as Bitcoin, at a predetermined price by a specified date. 

SEC Approval Crucial for Investor Protection

Typically employed for hedging against price fluctuations, mitigating potential losses, and potentially earning extra income through strategic approaches.

Flood and Nickel underscored the significance of SEC approval, highlighting its importance for the investors the commission aims to safeguard.

The regulatory body has been postponing verdicts on applications submitted in January by the New York Stock Exchange, Nasdaq, and Cboe Global Markets. Nasdaq applied to list and trade options on BlackRock’s iShares Bitcoin Trust, while Cboe aims to introduce options trading on several BTC funds. 

Likewise, the NYSE plans to offer options trading on Bitwise Bitcoin ETF, Grayscale Bitcoin Trusts, and any other trusts holding Bitcoin. Recently, the commission launched a fresh round of consultations regarding the proposed rule change to authorise options trading on Bitcoin funds.

As per a filing on April 24th, the SEC is delving into the potential impact of Bitcoin options on market stability, especially during periods of volatility. Additionally, the agency is scrutinising whether existing market surveillance and enforcement measures adequately handle the intricacies of Bitcoin options. Stakeholders are encouraged to provide initial feedback by May 15th and subsequent rebuttals by May 29th.

Conclusion:

The push by US legislators for the SEC to approve Bitcoin options trading reflects the growing need for fair treatment of cryptocurrency funds and enhanced investor protection. As the SEC evaluates the potential impact of Bitcoin options on market stability and considers feedback from stakeholders, the outcome will significantly influence the future of cryptocurrency investments.

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