Nasdaq Seeks SEC Approval for Options Trading on BlackRock’s Latest Ethereum Trust

The Nasdaq International Securities Exchange has submitted a proposal to the Securities and Exchange Commission seeking approval to trade options on a trust overseen by BlackRock.

According to a recent filing, the newly proposed iShares Ethereum Trust will hold Ethereum and cash, with Coinbase managing the Ethereum and The Bank of New York Mellon handling the cash.

The trust will focus solely on Ethereum and cash, avoiding Ethereum proof-of-stake validation or using assets for additional income through staking, maintaining its status as a passive investment vehicle.

Nasdaq aims to expand investment opportunities for Ethereum and enhance accessibility to crypto investments within traditional financial markets through this move.

The filing states that while the shares do not directly represent an investment in ether, they provide an alternative means for investors to gain exposure to ether through the public securities market, which may be more familiar to them.

The exchange believes that the rule change will offer investors a cost-effective way to access Ethereum, meeting their investment requirements, including hedging and speculation.

Options are commonly used by traders to hedge against potential investment losses or speculate on the future price of assets, providing flexibility compared to futures.

This development follows the SEC’s recent approval of various crypto ETFs in the U.S., including the first spot Bitcoin ETFs earlier this year and multiple Ethereum ETFs in May 2024.

The approval of these crypto products signifies progress, as they previously faced opposition and denial from the SEC for over five years.

If approved, the options on the trust will adhere to the same listing and trading regulations as other ETFs, encompassing criteria for underlying securities, expirations, strike prices, and trading halts.