Regulatory Delay
The U.S. Securities and Exchange Commission (SEC) postponed a decision on whether to permit the Cboe BZX Exchange to list options for Fidelity’s Ethereum (ETH) exchange-traded fund (ETF). The agency pushed back the deadline for the ruling to May 14, according to a March 12 SEC filing.
Cboe BZX initially submitted its application in January. The timing aligns with the SEC’s approach to similar filings, as the agency recently pushed Nasdaq ISE and Cboe Exchange’s upcoming rule changes in February.
Institutional Interest & Market Impact
Including Ether ETFs in options would be a giant leap for institutional investors, with options allowing them to hedge against risks or garner returns using derivatives. The move could also propel cryptocurrency deeper into mainstream financial markets.
Fidelity’s Ethereum Fund (FETH) remains a leader in the space, with approximately $780 million in net assets as of March 12, based on data from VettaFi. BlackRock’s iShares Ethereum Trust (ETHA), the biggest Ether ETF, however, has over $3.7 billion in net assets.
Staking & Broader SEC Considerations
On March 11, Cboe BZX likewise made a request to include staking in Fidelity’s Ether ETF. Staking involves locking up ETH to contribute to securing the network and earning a reward, but none of the U.S. Ether funds listed do so today.
Spot Ether ETFs, which were listed in July 2024, have already gained nearly $7 billion in net assets. The SEC is expected to make a ruling on Nasdaq’s application to list options for BlackRock’s ETHA in April, while Cboe’s application for Fidelity ETF options will be ruled upon in May.
Conclusion
While the SEC weighs Ether ETF possibilities, the decision may set the course for cryptocurrency investment products. As the regulatory landscape continues to evolve, institutional activity with Ethereum-based financial products will increase.
