The United States Securities and Exchange Commission (SEC) has approved options trading for multiple spot Ether (ETH) exchange-traded funds (ETFs), a move that may broaden the investment appeal of Ether among institutional traders.
The SEC issued the approval on April 9 after reviewing a proposed rule change submitted by BlackRock for its iShares Ethereum Trust (ETHA) on July 22, 2024. Similar approvals were granted to Bitwise Ethereum ETF (ETHW), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Mini Trust (ETH), as well as Fidelity Ethereum Fund (FETH).
“[T]he Exchange proposes to amend its rules to permit the listing and trading of options on the Trust,” the SEC said in its response to the Nasdaq, adding:
The Exchange states that options on the Trust will provide investors with an additional, relatively lower cost investing tool to gain exposure to spot ether as well as a hedging vehicle to meet their needs in connection with ether products and positions.
The SEC’s approval of options trading on the iShares Ethereum Trust. Source: SEC
Options on ETFs are a portfolio tool that gives investors the ability to hedge against a decline in assets. The strategy’s inclusion is seen as an important step in broadening Ether’s investment appeal after regulators approved the spot Ethereum ETFs last July.
So far, net inflows into the spot Ether funds have been fairly muted, with most of the institutional interest flooding into Bitcoin (BTC) funds.
BlackRock’s ETHA currently has $1.8 billion in net assets, down 56% since the start of the year, according to VettaFi.
Related: Ethereum price falls to 2-year low, but pro traders still have hope
Shifting regulatory tides
Since the election of US President Donald Trump, the SEC has signaled its readiness to scale back its enforcement initiatives against the crypto industry. Although this was expected, legal experts with the Harvard Law School Forum on Corporate Governance were surprised by “how quickly the shifting priorities would come to fruition” since Trump took office.
As Cointelegraph recently reported, the securities regulator has closed its investigations into various crypto companies, including exchanges Gemini and Coinbase, decentralized exchange developer Uniswap Labs, and NFT marketplace OpenSea.
On the legislative side, regulators are moving quickly to pass pro-stablecoin legislation. The House Financial Services Committee recently advanced the STABLE Act, which is meant to enshrine the use of stablecoins in the United States, and the Senate Banking Committee pushed through the GENIUS Act, which aims to regulate stablecoin issuers.
Lawmakers have also tipped plans to advance a comprehensive crypto market structure bill, which is expected to be finalized this year.
Related: No crypto project has registered with the SEC and ‘lived to tell the tale’ — House committee hearing