NYSE Applies with SEC to List Options for Ether ETFs by Grayscale and Bitwise

The New York Stock Exchange (NYSE) American has proposed a rule change to list and trade options for three Ether exchange-traded funds (ETFs) managed by Grayscale and Bitwise.

The move, detailed in an August 7 filing with the Securities and Exchange Commission (SEC), seeks to include options for the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH).

NYSE American said that the introduction of options trading on these Ether ETFs would benefit investors by providing a cost-effective means of gaining additional exposure to Ether.

Moreover, the filing highlighted the potential for options trading to serve as a valuable hedging tool for investors managing their ETH-related investments and positions.

SEC to Receive Comments in the Next 21 Days

The SEC is now expected to receive comments on this proposal within the next 21 days.

If approved, the rule change would specifically apply to the Grayscale and Bitwise Ether ETFs, the only spot Ether funds currently listed on the NYSE American exchange.

The initiative by NYSE American coincides with a similar request from the Nasdaq options exchange, which, on August 6, petitioned the SEC to permit options trading on the BlackRock iShares Ethereum Trust (ETHA).

Like NYSE American’s proposal, Nasdaq’s request is exclusively aimed at BlackRock’s fund, the sole Ether ETF listed on the Nasdaq exchange.

Both exchanges might face a protracted waiting period for SEC approval, as the regulatory body has yet to greenlight options trading on spot Bitcoin ETFs.

Despite the launch of these Bitcoin ETFs in January, which now hold approximately $50 billion in assets under management, the SEC has taken a cautious approach.

In July, the SEC indicated to several options exchanges, including Nasdaq, that additional time was required to reach a decision on listing options for spot Bitcoin ETFs.

Options trading is a crucial tool for hedge funds and financial planners, allowing them to mitigate risks associated with market volatility.

This is particularly relevant in the context of Ether’s market behavior, exemplified by a 28% drop in its spot price on August 5.

Additionally, options form the foundation for more complex investment strategies, such as the “covered strangle” strategy promoted by the investment research firm 10x Research.

Spot Ether ETFs See Outflows

On August 7, the Ethereum spot ETF market witnessed notable net outflows, amounting to $23.6766 million.

On August 7, the total net outflow of Ethereum spot ETF was $23.6766 million. Grayscale ETF ETHE had an outflow of $31.8571 million, and Fidelity ETF FETH had an inflow of $4.7046 million. The total net asset value of Ethereum spot ETF is $6.626 billion. https://t.co/Tvs2oCSxTg

— Wu Blockchain (@WuBlockchain) August 8, 2024

The Grayscale Ethereum Trust (ETHE) experienced a substantial outflow of $31.8571 million, highlighting a significant withdrawal by investors.

In contrast, the Fidelity Ethereum ETF (FETH) saw a positive influx, attracting $4.7046 million in new investments.

Despite these fluctuations, the total net asset value (NAV) of Ethereum spot ETFs remains robust, standing at $6.626 billion.

As reported, BlackRock’s iShares Ethereum Trust (ETHA) has been recording substantial inflows as of late, raising its total to around $900 million since its launch on July 23.

The $900 million inflow positions BlackRock’s spot Ether ETF among the top six best-performing ETFs launched in 2024.