The U.S. Securities and Exchange Commission (SEC) has decided to delay its review of Nasdaq’s proposal to list and trade options on BlackRock’s iShares Ethereum [ETH] Trust (ETHA).
Delay in Approval for BlackRock’s ETHA
Originally scheduled for a ruling by September 26, the SEC has postponed its decision until November 10.
The SEC, in a statement released on September 24, expressed that this extension aims to allow for a more thorough evaluation of the potential effects of this listing on market stability, ensuring a comprehensive review of its implications on the overall financial environment.
The Commission stated:
“The Commission deems it necessary to extend the time frame for reviewing the proposed rule change to ensure a meticulous assessment.”
Reasons for the Delay
Under Section 19(b)(2) of the Securities Exchange Act, the SEC has the authority to extend its decision-making process for up to 90 days.
The extension grants the regulator more time to assess market risks and stability thoroughly before reaching a final verdict.
This delay allows the SEC to conduct a comprehensive analysis of any potential impacts the decision might have on the broader financial sector.
In a related development, the SEC has also deferred its decision on NYSE American’s proposal concerning listing and trading options for Bitwise’s spot Ethereum ETFs, which include the Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust.
The new deadline for the decision has now been extended to November 11.
Approval for BlackRock’s IBIT
Interestingly, the SEC recently greenlit Nasdaq’s request to list and trade options for BlackRock’s spot Bitcoin [BTC] ETF.
On September 20, the SEC officially sanctioned options trading for the iShares Bitcoin Trust, which will be traded under the symbol IBIT.
According to Nasdaq, these options will adhere to the same regulations and conditions as other ETF options, further broadening investment opportunities in Bitcoin.
Performance of Ethereum ETFs and Outflows
Despite these developments, Ethereum ETFs have witnessed significant outflows post their launch, totaling a cumulative $624.4 million, primarily influenced by Grayscale’s Ether ETF (ETHE).
The outflows have been particularly noticeable in recent weeks, with September 23 recording the largest net outflow since July, with withdrawals amounting to $79 million.
Most notably, Grayscale’s ETHE experienced a significant $80.6 million outflow in a single day, the largest since the inception of spot Ether ETFs earlier this year.
Despite occasional inflows, the trend predominantly reflects substantial withdrawals from these funds.