BlackRock and Nasdaq propose Ethereum ETF options for spot trading

August 8, 2024

BlackRock, a prominent asset management firm, and the global stock exchange Nasdaq have jointly put forth a proposal to introduce options for the iShares Ethereum Trust (ETHA), BlackRock’s primary spot Ethereum offering.

The initiative by BlackRock aims to develop financial agreements that grant investors the ability to buy or sell shares of the ETF at a predetermined price in the future. These options, if granted approval, would provide investors with increased flexibility and tactics for managing their exposure to Ether (ETH).

The proposed options, as outlined in a filing dated August 6, will adhere to the same regulations as other ETF options to ensure fair competition. Nasdaq assures that these options will not unjustly disadvantage other market participants or impede competition.

The introduction of these new options is anticipated to offer investors a wider array of choices and potentially reduce costs. It is expected to benefit investors by providing a more streamlined approach to investing in Ethereum and by offering expanded hedging opportunities.

Nasdaq’s intention to list options on the Trust for trading on the Exchange is seen as a move that will foster competition by giving investors an additional, cost-effective method to hedge their portfolios and fulfill their investment requirements related to spot ether prices and ether-linked products and positions.

Nasdaq’s experience in listing options on other commodity ETFs structured as trusts, including those from BlackRock, underscores their expertise in this area.

Bloomberg ETF analyst James Seyffart points out that the Securities and Exchange Commission (SEC) has a 21-day review period for the proposal, with a potential final decision deadline projected around April 9, 2025. The proposal also necessitates approval from the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC).

While BlackRock and Nasdaq had previously submitted a proposal to allow options trading on BlackRock’s spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), the SEC is yet to approve options for spot Bitcoin ETFs from any asset managers. Although several spot Bitcoin ETFs were endorsed by the SEC in January 2024, the consideration of proposed rule changes for options trading linked to these ETFs has been given an extended timeline.

There have been calls from Congress for SEC Chair Gary Gensler to swiftly approve options trading for spot Bitcoin ETPs, emphasizing the need for clarity and consistency in the SEC’s treatment of these financial products, particularly following the approval of spot Bitcoin ETFs.