Cboe re-files for spot Bitcoin ETF options in sign SEC may be engaging: analysts

Cboe withdrew and re-filed its application to list options on spot Bitcoin exchange-traded funds late Thursday, signaling the Securities and Exchange Commission is potentially engaging in the process.

Earlier Thursday, Bloomberg Intelligence analyst James Seyfarrt said he expected options on spot Bitcoin ETFs to become available in Q4. “Final deadline for SEC decision is ~Sept. 21 but there's more steps needed after that from OCC and CFTC," Seyffart posted on X.

However, shortly after, the Miami International Securities Exchange, MIAX PEARL and BOX Exchange withdrew their applications to list spot Bitcoin ETF options, according to filings with the SEC.

“Not gonna read much into it for now. The exchange filings that matter IMO are the ones that list the ETFs — Nasdaq, NYSE and CBOE,” Seyffart responded. “Weird.. but just to be clear to anyone reading this, the ones withdrawing are three tiny exchanges. The Big Dawgs (NYSE, Nasdaq, CBOA) still have active applications (which we think have a good chance of approval later this year),” fellow Bloomberg Intelligence analyst Eric Balchunas added.

After Cboe then followed the three smaller exchanges, Seyffart said there's “definitely some movement” on options for spot Bitcoin ETFs. “Cboe just withdrew their application for options on spot Bitcoin ETFs. Which sounds like a bad thing at first... But at the same time, they just re-filed a brand new and updated application.”

Seyffart highlighted that the new filing states the Cboe proposes a rule change “to allow the exchange to list and trade options on units that represent interests” of the Fidelity, Ark Invest/21Shares, Invesco, Franklin Templeton, VanEck, WisdomTree, Grayscale, Bitwise, BlackRock and Valkyrie spot Bitcoin ETFs, designating them as “units deemed appropriate for options trading on the exchange.”

The original application, filed in January, proposed a rule change to allow the exchange to list and trade options on units representing interests in a trust that holds spot Bitcoin ETFs without specifying which.

“The original filing was only 15 pages. This new one has a lot more meat to it at 44 pages. To me it means that the SEC likely gave some sort of feedback? Which looks like it was related to position limits and market manipulation concerns,” Seyffart added.

Restarting the clock

“Just as ‘comments from the SEC’ was a good sign in our ETF approval odds, we think this is a good sign here too,” Balchunas said. “Because if they were just gonna deny outright why bother engaging at all?”

However, there is no way to know for certain if the SEC is indeed engaging with the Cboe on the application, and there is a downside, Seyffart warned. “One downside here is that I think this restarts the clock. So the deadline would move to some time at the end of April (Apr 25th-ish). But if the SEC is engaging — the deadline might not actually matter? Time will tell,” he said.

“Hard to tell the timing. We’re nosing around now and will update as appropriate,” Balchunas added.

“While regulators decide whether it’s ok for you to trade options on spot Bitcoin ETFs… Here’s a list of ETFs they’ve deemed ok for options to exist,” The ETF Store President Nate Geraci noted, pointing to Bloomberg Intelligence’s list of existing crypto derivatives ETFs with options, including Bitcoin and Ethereum Futures, levered and inverse products. “Make it make sense,” he said.

On Wednesday, NYSE American proposed a rule change to list and trade options on Bitwise’s and Grayscale’s spot Ethereum ETFs.