BlackRock’s Ethereum ETF Options Face Delay—Will SEC Approve It?

• The SEC has delayed its decision on BlackRock’s Ethereum ETF options trading until April 9, 2025.
• The agency extended the review period to assess market stability, investor protection, and potential risks.
• BlackRock’s spot Ethereum ETF was approved in May and began trading alongside other similar funds.

The U.S. Securities and Exchange Commission postponed its decision on BlackRock’s request to list and trade options on its Ethereum ETF. The agency announced it would decide by April 9, 2025, whether to approve or reject the proposal. The delay allows regulators more time to evaluate the rule change and any potential risks.

SEC Extends Review of BlackRock Ethereum ETF Options

BlackRock’s spot Ethereum ETF received approval in May and launched trading alongside eight similar funds. Later, Nasdaq, acting on behalf of BlackRock, submitted a request to list and trade options on the iShares Ethereum Trust. The SEC has extended its review period, citing the need to examine the proposal thoroughly.

The commission stated that assessing the proposed rule change and any concerns raised requires additional time. The delay ensures a careful review of market stability, investor protection, and the impact on financial markets. Regulators emphasized that they would decide after fully considering all relevant factors.

BlackRock remains one of the leading asset managers pursuing cryptocurrency-related investment products. The firm’s spot Bitcoin ETF received similar regulatory scrutiny before gaining approval. Its Ethereum ETF faces comparable challenges, particularly regarding derivative trading risks.

Concerns Raised Over Ethereum ETF Options Trading

The SEC’s delay follows responses from industry groups regarding Nasdaq’s proposal. Better Markets, a nonprofit organization advocating for a more muscular financial system, urged caution over options trading for crypto ETFs. The group emphasized Ethereum’s high volatility and potential risks to retail investors.

Benjamin Schiffrin, Better Markets’ director of Securities Policy, expressed concerns about options trading leading to investor losses. He warned that sophisticated traders might exploit retail investors through complex derivatives. The organization also noted that Bitcoin and Ethereum ETFs carry similar volatility risks.

Regulators have been scrutinizing crypto-related financial products due to potential market manipulation. The SEC has prioritized protecting retail investors from excessive risks tied to derivatives. Market analysts expect the agency to weigh these factors heavily before deciding.

Fidelity’s Ethereum ETF Options Await SEC Review

The SEC also requested public comments on a similar proposal from Cboe BZX Exchange Inc. on behalf of Fidelity. The proposal seeks approval to list and trade options on Fidelity’s spot Ethereum ETF. The agency has invited market participant feedback to understand potential risks and benefits better.

Interested parties have 21 days to submit comments after the notice is published in the Federal Register. The SEC often considers public input before ruling on major financial products. This step ensures transparency and helps regulators gauge market sentiment.

Fidelity’s proposal reflects the growing demand for Ethereum-related investment options. Institutional and retail investors have shown increasing interest in crypto ETFs. The SEC’s final decision will significantly impact the future of Ethereum derivatives in traditional markets.