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According to the Grayscale CEO, approving exchange-listed options for spot Bitcoin ETF would help investors better navigate the market and earn more profits.
A Case For Exchange-Traded Options
An exchange-traded option denotes a standardized agreement that facilitates the purchase (via a call option) or sale (via a put option) of a specified quantity of a financial asset at a predetermined price, referred to as the strike price, on or before a selected date. Investors use this financial instrument to predict the prospective fluctuations of specific equities or bonds and the broader stock market.
Furthermore, these options attract investors because they are regulated by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Also, they are listed on prominent exchanges like the Chicago Board Options Exchange (Cboe).
As a clearinghouse, the Options Clearing Corporation (OCC) is entrusted with providing guarantees for the exchanges involved.
Unifying Regulatory Approach To Crypto-Based ETFs
Meanwhile, Michael Sonnenshein opined that commodity-based ETFs do not follow the same regulatory structure, as evidenced by the recent sanctioning of spot Bitcoin ETFs. These entities undergo a review process comparable to the 19b-4 approach of classifying Bitcoin ETFs.
Noting the gap between spot and futures BTC-based ETFs, the Grayscale CEO argued that there should be equal treatment for both crypto products. Sonnenshein highlighted a recent development in which the New York Stock Exchange and other national exchanges submitted Forms 19b-4 to revise listing criteria to include listed options on commodity-based exchange-traded funds (ETFs), including spot Bitcoin ETFs.
Currently, the SEC is reviewing applications for listed options on spot BTC ETFs and seeking feedback on the options offered by a collaboration between BlackRock and Cboe. According to Bloomberg ETF analyst Eric Balchunas, the SEC could make its stance known by September 2024.
More Crypto-Based Services
Meanwhile, leading asset management giant WisdomTree has teamed up with the New York State Department of Financial Services (NYDFS) to offer crypto-based services in the state. Sources familiar with the development noted that the regulator is on the verge of sanctioning a Limited Purpose Charter for the asset manager.
Reports indicate that the authorization granted by the NYDFS allows WisdomTree to perform digital asset-related operations in New York. Except for well-known companies like Coinbase and Fidelity, WisdomTree is one of only nine organizations with Limited Purpose Trust Charters developed exclusively for the crypto industry.
With its Limited Purpose Trust Charter license, WisdomTree has the legal competence to act as a custodian or depositor for securities in New York.
Offering Consumers Exposure To Bitcoin
As one of the recently approved issuers of a spot Bitcoin ETF in the United States, WisdomTree offers users innovative investing options with exposure to Bitcoin. Significantly, the WisdomTree Bitcoin fund, represented by the BTCW ticker, is actively listed and traded on the Cboe BZX exchange.
Furthermore, investors believe that approving a spot BTC ETF and other regulatory efforts is a game-changing development that will accelerate and strengthen investing in Bitcoin for a broader range of investors. Moreover, this move establishes an innovative regulatory structure for investing in Bitcoin and other crypto assets. Hence, it is no wonder other countries like South Korea are taking a cue from the US SEC’s move.
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