SEC Approves Options Trading for Ethereum Spot ETFs Managed by Fidelity, BlackRock, Bitwise, and Grayscale

The United States Securities and Exchange Commission (SEC) has officially approved options trading for Ethereum (ETH) spot exchange-traded funds (ETFs) managed by Fidelity, BlackRock, Bitwise, and Grayscale. Announced on April 9, 2025, this landmark decision signifies a major step toward mainstream adoption of Ethereum-based financial products, providing investors with new tools to interact with the world's second-largest cryptocurrency by market capitalization.

The approved ETFs include BlackRock's iShares Ethereum Trust (ETHA), Fidelity's Ethereum Fund (FETH), Bitwise's Ethereum ETF (ETHW), and two Grayscale products: the Grayscale Ethereum Trust (ETHE) and the Grayscale Ethereum Mini Trust (ETH).

Options trading enables investors to buy or sell an asset at a predetermined price by a specific date, offering mechanisms for hedging risk or speculating on price movements without directly owning the underlying asset. For Ethereum spot ETFs, this development introduces enhanced flexibility and liquidity, potentially drawing institutional players who have been cautious about direct exposure to cryptocurrencies.

The approval of options trading followed months of regulatory scrutiny. In May 2024, the SEC formally approved Ethereum spot ETF trading. Subsequently, Nasdaq ISE submitted an application to the SEC to allow options contracts for BlackRock's iShares Ethereum Trust (ETHA). According to the filing, the SEC was required to make a decision by April 2025. Other Ethereum ETFs also submitted applications for options trading approval. In September 2024, the SEC approved Nasdaq Electronic Securities to list options on IBIT, marking the agency's first approval of spot Bitcoin ETF options trading in the U.S. However, Ethereum ETF proposals faced repeated delays from the SEC.

Ultimately, approval was granted after exchanges such as Nasdaq, NYSE, and Cboe submitted revised proposals to ensure compliance with securities laws aimed at preventing fraud and manipulation, particularly Section 6(b)(5). For instance, Nasdaq's filing for ETHA emphasized that options would operate under the same rules as traditional ETFs, with trust and exercise limits capped at 25,000 contracts to mitigate risks of market manipulation.

Analysts view this as a precursor to further innovation. "Expect to see a bunch of new launches from issuers—covered call strategy ETH ETFs, buffer ETH ETFs, etc.," Nate Geraci, president of The ETF Store, commented on X. Meanwhile, companies like Fidelity are pushing for staking approval, which would allow ETFs to earn rewards from the ETH they hold, with a decision deadline set for October 2025.

According to CoinMarketCap data, ETH price reflected this optimism as of April 10, 2025. The announcement of President Trump's decision to suspend tariffs on 75 countries for 90 days compounded ETH's bullish momentum. Over the past 24 hours, ETH surged 13% from a two-year low of $1,445 to $1,679.