BlackRock and Nasdaq seek approval for options trading in the BlackRock spot Ether ETF

BlackRock and Nasdaq recently filed for an allowance for options trading on the BlackRock spot Ether ETF, the iShares Ethereum Trust (ETHA). The Nasdaq International Securities Exchange submitted the request to the U.S. Securities and Exchange Commission (SEC) on August 6.

ETHA is notably the only spot Ether ETF listed on the Nasdaq exchange. Other Ether ETFs, including VanEck, Bitwise, Grayscale, 21Shares, and Invesco Galaxy, are on the Cboe Global Markets and the New York Stock Exchange’s Arca. 

BlackRock and Nasdaq mentioned in the filing that introducing options trading would create more ETH trading instruments for investors at a lower cost. The two companies also explained the allowance would expose investors to Ethereum through spot ETH. 

Options trading will allow traders to buy and sell the ETF at a specific price before a specified date. The trading type offers flexibility that is lacking in futures trading, giving investors more time to make trading decisions. 

BlackRock further outlined in the filing that ETHA would purely handle ETH, which will be in Coinbase’s custody. The Bank of New York Mellon would be in charge of the trust’s cash. The investment management company assured that it wouldn’t engage in any ETH staking, therefore remaining a passive investment.

BlackRock established itself as a key player in the commodities ETF industry. BlackRock structures the ETFs as trusts, such as the iShares Bitcoin Trust (IBIT), iShares COMEX Gold Trust, and iShares Silver Trust. 

The U.S. SEC to review the proposed changes

Nasdaq and BlackRock's filing to add options on Ethereum ETFs has hit the SEC site. Final SEC decision on this from SEC likely to be around April 9th, 2025.

(SEC is not the only decision maker on adding options here. Also need signoff from OCC & CFTC) https://t.co/K4HunUPp7S pic.twitter.com/5kQH0mljTz

— James Seyffart (@JSeyff) August 6, 2024

The U.S. SEC has yet to make any decision on the matter despite the two companies submitting the regulatory filing. The commission still added the filing to its website and has 21 days to comment. 

Bloomberg Intelligence analyst James Seyffart tweeted that the timeline for the U.S. SEC’s decision could supposedly be in April 2025. James also mentioned that the decision would need signoff from the Options Clearing Corporation (OCC) and the Commodity Futures Trading Commission (CFTC).

Nasdaq and other exchanges previously applied for options trading on spot Bitcoin ETFs. The commission informed the companies in July that it needed more time to reach a decision.

BlackRock’s ETFs top the market

Despite the crypto market turmoil, Ether ETFs continued to perform well, recording massive inflows this week. Data from Farside Investors revealed that Ether ETFs recorded more inflows on August 6, with BlackRock leading at over $109 million. Fidelity followed with over $22 million in net inflows. 

The U.S. SEC approved spot Ether ETFs in late July, introducing nine ETFs to the industry. BlackRock’s ETHA remains the top-performing ETF, recently nearing $900 million since its launch. Nate Geraci, the president of The ETF Store, tweeted that ETHA remained among the top 10% of ETFs introduced in 2024.

Nate Geraci lamented about the regulatory hurdles preventing spot ETFs’ progress despite spot Ether ETFs’ positive performance. The ETF Store president commented on the lack of options trading and staking options. Nate further highlighted the industry demand for ETFs, including by traditional finance investors.