SEC Should Not Approve Options for Spot Ether ETPs
The Securities and Exchange Commission (SEC) received a Comment Letter from Better Markets regarding the proposed rule changes to allow options trading on spot ether exchange-traded products (ETPs). In their letter, “The SEC endangered retail investors by approving spot bitcoin ETPs, spot ether ETPs, and options on spot bitcoin ETPs. It must reverse this trend and deny proposed rule changes to list and trade options on spot ether ETPs. Ether is incredibly volatile, and retail investors could suffer immense harm trading options on an ETP whose underlying asset is ether.”
The concern is that approving options trading on a volatile asset like ether could be disastrous for retail investors. Retail investors already face significant losses when trading options, and adding options on spot ether ETPs could further exploit them. Additionally, the risks of financial instability increase when traditional finance is tied to volatile assets like ether, which uses a Proof-of-Stake (PoS) protocol.
Better Markets, a non-profit organization, advocates for financial reform and public interest in financial markets. They believe that the approval of spot ether ETPs was a mistake and warn against compounding that error by approving options on spot ether ETPs.
You can find the full comment letter from Better Markets on their website if you’re keen to explore this topic further. Better Markets aims to create a safer financial system that protects and promotes the interests of all Americans. To learn more about their work and initiatives, visit www.bettermarkets.org.