SEC Delays Decision on BlackRock’s Ethereum Options: What’s Next for Crypto ETFs?

The U.S. Securities and Exchange Commission (SEC) has delayed its decision on a proposed rule change by Nasdaq’s International Securities Exchange, which would allow the listing and trading of options on BlackRock’s iShares Ethereum Trust (ETHA). Originally expected by September 26, the ruling has been postponed to November 10, granting the SEC more time to assess the potential market impact.

The final decision on Ethereum options could further integrate cryptocurrencies into mainstream financial markets. Advocates believe crypto ETF options could bring increased liquidity and fuel bullish sentiment in the market.

If approved, these options would follow the same regulatory guidelines as other ETF-related derivatives, providing investors with new opportunities to hedge or speculate on Ethereum’s price. Under Section 19(b)(2) of the Securities Exchange Act, the SEC can delay its ruling by up to 90 days to thoroughly review market risks and stability.

The proposal, submitted on July 22, seeks to modify existing rules to enable options trading on BlackRock’s iShares Ethereum Trust. This trust, which holds Ethereum managed by Coinbase and cash reserves by The Bank of New York Mellon, is a passive investment vehicle focused solely on Ethereum exposure without engaging in staking or proof-of-stake activities.

This delay follows a recent SEC approval on Monday for options trading on BlackRock’s iShares Bitcoin Trust (IBIT), after multiple amendments addressed concerns about market manipulation and excessive risk. In addition, the SEC has also postponed its decision on a separate proposal by NYSE American LLC to list and trade options on the Bitwise Ethereum ETF, Grayscale Ethereum Trust, and Grayscale Ethereum Mini Trust.

Meanwhile, the Ethereum ETF market has seen turbulence, with ETFs recording significant outflows. On Monday, Ethereum ETFs experienced their largest net withdrawals since July, losing over $79 million. Grayscale’s spot Ether ETF (ETHE) led the outflows, with a record $80.6 million withdrawn in a single day—its biggest since the ETF’s launch earlier this year.