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The United States Securities and Exchange Commission (SEC) has granted approval for the trading of options on several spot Ether exchange-traded funds (ETFs). The decision, announced on April 9th, is expected to enhance the investment appeal of Ether, the second-largest cryptocurrency, particularly among institutional investors seeking sophisticated hedging and trading strategies.
The SEC's approval follows a review of proposed rule changes, notably one submitted by BlackRock for its iShares Ethereum Trust (ETHA) back in July 2024. Similar green lights were also given to options trading for ETFs from other major players in the digital asset space, including the Bitwise Ethereum ETF (ETHW), Grayscale Ethereum Trust (ETHE), Grayscale Ethereum Mini Trust (ETH), and the Fidelity Ethereum Fund (FETH).
In its response to the Nasdaq, where these options are expected to be listed and traded, the SEC stated that allowing options on these Ether ETFs would provide investors with "an additional, relatively lower cost investing tool to gain exposure to spot ether as well as a hedging vehicle to meet their needs in connection with ether products and positions."
Options on ETFs are a crucial portfolio management tool, enabling investors to protect their holdings against potential price declines. The introduction of these options is widely seen as a natural progression following the SEC's approval of spot Ethereum ETFs in July 2024.
While the spot Ether ETFs have garnered attention, their net inflows have been notably lower compared to the significant institutional interest witnessed in Bitcoin funds. BlackRock's ETHA, for instance, currently holds $1.93 billion in net assets, marking a 59% decrease since the beginning of 2025, according to SoSoValue data. The availability of options could potentially attract more sophisticated traders and institutional capital by offering greater flexibility in managing risk and expressing investment views.
