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Grayscale Lobbying for Regulatory Approval of Options for Spot Bitcoin ETFs

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Grayscale is pushing for the US SEC to approve options on its Bitcoin exchange-traded fund (ETF), Reuters reported on February 29.

Michael Sonnenshein, CEO of Grayscale, said:

“It is vital to the interests of GBTC and all spot Bitcoin (exchange-traded product) investors to have access to exchange-traded options on GBTC and other spot Bitcoin ETPs.”

The SEC approved Grayscale’s Bitcoin ETF (GBTC) in January. Unlike most other newly approved spot Bitcoin ETFs, GBTC was converted into an ETF from an existing fund.

Options could improve regulation

According to Sonnsenshein, the SEC’s rejection of options on GBTC would unfairly discriminate against shareholders because the regulator approved options on Bitcoin futures ETFs.

He added that options could also support spot investments in Bitcoin ETFs more broadly, as they could enable price discovery, make market conditions easier to navigate, and support hedging and income generation.

Additionally, the options would bring BTC into the regulatory scope, allowing more market participants, including contract traders and brokers, to trade the funds.

Grayscale’s letter was reportedly prompted by the SEC’s decision to open options comments for its ETF on February 23. The regulator’s notice also opened comments on Bitwise’s equivalent ETF and other NYSE-listed trusts that hold Bitcoin.

Previously, in January, the SEC opened comments on options for BlackRock’s Nasdaq-listed spot Bitcoin ETF and various Cboe-listed spot Bitcoin ETFs.

Grayscale is a key player in ETFs

Grayscale’s communications with the SEC are critical as its past efforts contributed to the approvals. After the SEC rejected Grayscale’s one-time Bitcoin ETF application, the company filed a lawsuit against the regulator and won a victory that forced the SEC to reexamine the case.

SEC Chairman Gary Gensler cited this outcome in his agency’s approval of spot Bitcoin ETFs, noting that the legal outcome made approval the “most sustainable path forward.”

The company and other asset managers have also requested Ethereum spot ETFs. The Grayscale app recently gained support from Coinbase on February 21.

While Grayscale’s latest letter in no way compels the SEC to take action, the company’s past prominence means its comments could influence future results.

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