SEC greenlights options trading for spot Ether ETFs

In a quiet but notable development for crypto, the US Securities and Exchange Commission (SEC) has approved options trading on a series of spot Ether exchange-traded funds (ETFs), marking another incremental shift toward traditional finance adopting digital assets within existing markets.

The approval, announced on 9 April 2025, follows a rule change proposal first lodged by BlackRock for its iShares Ethereum Trust (ETHA) in July 2024. The green light extends beyond BlackRock, covering other funds such as the Bitwise Ethereum ETF (Ticker: ETHW), Grayscale’s Ethereum Trust (ETHE) and Ethereum Mini Trust (ETH), as well as Fidelity’s Ethereum Fund (FETH).

The SEC’s notice clarifies that options on these ETFs will offer investors another tool to access Ether (ETH), the native token of the Ethereum blockchain, not only for exposure but also as a hedge. This step makes Ether products more versatile, especially for institutional investors seeking to manage risk across crypto-asset holdings.

Options are a common feature in equity and commodity markets, and their availability in relation to spot Ether ETFs may help legitimise ETH’s role as a portfolio asset. While initial flows into Ether ETFs have been modest compared to the dominant interest in Bitcoin (BTC) equivalents, this new layer of optionality could make ETH more attractive for professional investors who are accustomed to hedging strategies.

According to VettaFi, BlackRock’s ETHA fund has seen its net assets fall 56% this year, now sitting at approx USD $1.8 billion. These numbers point to a market still testing the waters (or perhaps reflective of broader market sentiment and activity in recent times). That said, regulatory support for new instruments around Ether indicates a slow but steady maturing of the digital asset space.

Behind the scenes, the regulatory tone in the US appears to be shifting. Since President Trump’s return to office, the administration has signaled a softer stance on enforcement in the crypto industry. This is being seen not only in rule-making, but in practice, as investigations into firms such as Coinbase, Gemini, Robinhood, Uniswap Labs and OpenSea have reportedly been wound down. While the long-term implications are still playing out, the trend suggests greater space for innovation, particularly among well-resourced firms.

Meanwhile, US lawmakers are advancing several crypto-related bills. The STABLE Act and GENIUS Act, both progressing through key committees, aim to establish clearer rules around stablecoin issuance and usage.

From an Australian perspective, these developments are worth watching. While our own approach to digital assets regulation has been more cautious, institutional interest is growing locally. For blockchain developers and financial services providers alike, these changes hopefully suggest a slow but meaningful shift toward clearer rules and broader market participation.

Written by Steven Pettigrove, Luke Higgins and Michael Bacina