SEC Approves Ether ETF Options
Institutional investors gain new tools as crypto-friendly regulatory stance solidifies under Trump administration.
The US Securities and Exchange Commission (SEC) has approved options trading for spot Ether exchange-traded funds, delivering a significant victory for institutional crypto adoption just as Ethereum was struggling to maintain momentum.
The second-largest cryptocurrency rebounded sharply from $1,400 to $1,675, a 14% surge following the announcement, breaking a months-long downtrend that had seen the asset shed over half its value since January.
The SEC's green light applies to several key Ether ETFs, including:
BlackRock's iShares Ethereum Trust (ETHA)
Bitwise Ethereum ETF
Grayscale Ethereum Trust
Grayscale Ethereum Mini Trust
This regulatory breakthrough, finalised between April 9-10 following filings from Nasdaq ISE and NYSE American LLC, gives sophisticated investors powerful new tools for hedging risk and leveraging exposure to Ethereum without directly holding the digital asset.
"Like with Bitcoin ETFs, expect to see a bunch of new launches from issuers. Covered call strategy ETH ETFs, buffer ETH ETFs, etc," said Nate Geraci, President of the ETF Store, highlighting the potential product explosion to follow.
The approval marks another milestone in the remarkable regulatory turnaround under Acting SEC Chair Mark Uyeda and the Trump administration's crypto-friendly approach.
Bloomberg Intelligence ETF analyst James Seyffart called the decision "100% expected" given prior approvals for Bitcoin ETF options in 2024, but the timing is noteworthy against the backdrop of Trump's broader crypto initiatives.
The administration's push for a US Crypto Strategic Reserve and recent reversal of Tornado Cash sanctions suggests a comprehensive policy shift that's breathing new life into markets that appeared on life support just months ago.
Despite the positive regulatory developments, Ether ETFs have struggled to match their Bitcoin counterparts in attracting investor capital.
BlackRock's ETHA currently holds $1.8 billion in net assets, down 56% year-to-date and a fraction of the inflows seen in Bitcoin ETFs.
The next regulatory frontier, and potentially a game-changer, remains staking approval, which would allow ETF holders to earn yield from their Ethereum exposure.
"It's possible they could be approved for staking early, but the final deadline is at the end of October," Seyffart noted, pointing to what could become Ether ETFs' most compelling advantage over their Bitcoin counterparts.
Will options trading capability finally spark the institutional interest that Ethereum supporters have been waiting for?
For now, the market has responded positively to the options milestone.