Ethereum ETFs have been in the news a lot since the start of this year for different reasons. These new investment opportunities have come a long way from hype to approval. However, the latest news about Ethereum ETFs isn’t so good.

The United States Securities and Exchange Commission has recently announced its conclusion to delay its decision on a rule change proposed by Nasdaq’s International Securities.

The content of the proposed rule was to allow the listing and trading of options on BlackRock’s iShares Ethereum Trust (ETHA). The SEC was initially expected to give its decision on the 26th of September, but in the announcement, the new date has been changed to the 10th of November.

As for the reason given for the postponement, the SEC stated that the delay would give it more time to evaluate the potential impact the proposal could have on the market’s stability. 

Many have been looking forward to the SEC’s decision on the proposal, primarily because of its potential to help integrate Ethereum crypto into TradFi markets. Some even believe that options for crypto ETFs could be instrumental in injecting a new wave of liquidity into the market and generating bullish market behavior. 

While the decision remains pending, the trending speculations are that if the proposal is approved, the options would likely follow the same regulatory framework as other ETF-linked derivatives. This could mean a new way for investors to hedge or speculate on Ethereum’s price movements.

Although a delay in this decision might seem odd, the SEC is legally allowed to do so. Under Section 19(b) (2) of the Securities Exchange Act, the SEC is allowed to delay its ruling for up to 90 days. 

The proposal has been submitted to the SEC since July 22. It seeks to amend the current rules to enable options trading on BlackRock’s iShares Ethereum Trust. The trust contains Ethereum, which Coinbase manages, and cash reserves by The Bank of New York Mellon.

This trust is designed to be a passive investment vehicle, focused only on increasing exposure to Ethereum without the need to engage in activities like staking or proof-of-stake validation.

However, while the SEC has delayed this particular proposal, it recently approved options trading on BlackRock’s iShares Bitcoin Trust (IBIT) after several amendments to address some issues related to market manipulation and excessive risk-taking.

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In other news, the SEC also delayed its decision on another proposal. This proposal, submitted by NYSE American LLC, sought approval to list and trade options on three securities: the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust. 

So, it seems the SEC is only taking precautionary measures to ensure that approving the proposals would benefit the market and not otherwise. However, while the delay continues, the Ethereum ETF market has become shaky as it recorded over $79 million in net outflows on Monday, its largest since July.

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