CBOE Resubmits Bitcoin ETF Application After SEC Feedback

The CBOE's updated application came after the SEC feedback suggested possible ongoing discussions. The annex has additional information on position limits and market manipulation.

The Chicago Board Options Exchange (CBOE) has resubmitted its application to the Securities and Exchange Commission (SEC) for options on spot Bitcoin exchange-traded funds (ETFs). This move comes after the CBOE withdrew its initial application in September.

The CBOE's new application is 44 pages long and includes an annex with additional information on topics such as position limits and market manipulation. This information was likely requested by the SEC in response to the CBOE's initial application.

The CBOE's resubmission will reset the SEC's review period for the application. The SEC now has 180 days to approve or deny the application, which could take place by April 2025.

According to Bloomberg ETF analyst James Seyffart, the new application may indicate that the CBOE is getting closer to obtaining approval for Bitcoin ETF options.

The development comes as the SEC is expected to make its final decision on the matter by September 21. However, the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC) must still take action to begin trading the options.

The approval of Bitcoin ETF options is expected to expand the range of investment strategies available in the market. While some analysts anticipate the approval by the end of 2024, others believe it may take longer.

The CBOE's over-preparedness, including the detailed resubmission, is seen by analysts as a sign of their ability to meet the requirements.

Additionally, the resubmission highlights the demand for more Bitcoin ETFs in the market, which could lead to the adoption of new investment strategies like covered call writing.

Nate Geraci, president of the ETF store, mentioned the possibility of trading options on some of the cryptocurrency derivatives exchange-traded products (ETPs). This further supports the need for options on spot Bitcoin ETFs, increasing market expectations.

If adopted, these options will provide investors with another avenue for managing risk and generating income.

In related news, the New York Stock Exchange (NYSE) has filed a new rule change to list and trade Ether ETF options. This proposal focuses on the three Ether ETFs, Grayscale and Bitwise, in a bid to develop the options market further within the cryptocurrency domain.

The working group will submit the proposal to the SEC, which should consider the group's comments within 21 days. The exchange is seeking approval to list and trade options on three Ether ETFs.

If permitted, the move will only apply to the Grayscale and Bitwise Ether ETFs trading on the NYSE American exchange. This step also highlights the increasing attention paid to cryptocurrency derivatives within the digital asset sphere.