The Securities and Exchange Commission has posted a Notice of Withdrawal of Proposed Rule Change to Amend ISE Options. Specifically, the NASDAQ has pulled its request to allow the exchange to list and trade options on units that represent interests in a trust that holds Bitcoin.
This past May, NASDAQ Vice President of US Options, Greg Ferrari, sent a letter to the Commission outlining the reasons while the option request should be approved. Ferrari said that based on current levels of trading, these Bitcoin products would meet the initial listing criteria for options to be listed as they are widely held and actively traded. Effectively, they should be treated similar to stock options.
Better Markets, a left wing advocacy group, countered the request as they feared the options could “expose retail investors to a tremendous amount of risk.” In the letter, Better Markets claims that “untethered access to options (by both retail and professional investors) combined with the turbocharge of information flow through social media, and forums like Reddit, have created modern conditions for bubbles to quickly form.”
Last month, the Commission indicated it wanted more time to consider the proposal, thus delaying the decision. NASDAQ withdrew the request on August 13th.
While NASDAQ has decided to hold off on pursuing options on Bitcoin trusts, this may just be a slight delay instead of defeat. As the Presidential elections will take place this November, a new coterie of policymakers will most likely take over the reigns of the SEC as former President Trump is decidely pro-crypto and Vice President Harris is currently attempting to repair the damage done by the Biden Administration in regard to the digital asset industry.
