The U.S. Securities and Exchange Commission (SEC) approved a rule change allowing MEMX Exchange to list and trade options on BlackRock’s iShares Ethereum Trust (ETHA), effective immediately upon filing. This decision follows Nasdaq ISE’s July 2024 proposal and marks a significant expansion of crypto derivatives accessibility.
Regulatory Mechanics and Immediate Effect
The SEC’s May 9, 2025 filing classifies ETHA shares as Commodity-Based Trust Shares under MEMX Rule 14.11(b)(5). Options contracts will be cash-settled with 100 shares per contract, trading in $1-$5 strike price intervals. The approval follows precedent set by Bitcoin ETF options in 2024.
Market Implications and Institutional Response
BlackRock’s ETHA saw $12.5 million in options volume during early trading sessions. Competitors like Bitwise Ethereum ETF and Grayscale Ethereum Trust are expected to file similar options proposals within 30 days, according to etf.com analysis.
| Product | Options Volume (Day 1) | Strike Intervals |
|---|---|---|
| iShares Ethereum Trust (ETHA) | 12,500 contracts | $1-$5 |
Bloomberg Intelligence ETF analyst James Seyffart noted: ‘This was inevitable after Bitcoin ETF options demonstrated stable price discovery. Expect 30-40% of ETHA holders to use options for hedging within six months.’
Strategic Positioning and Future Projections
MEMX Exchange gains first-mover advantage in ETH derivatives, while Cboe prepares competing filings. The approval enables covered call strategies that could generate 8-12% annual yield for ETH holders, according to ETF Store President Nate Geraci.
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This regulatory milestone likely accelerates institutional Ethereum adoption, with options markets providing crucial volatility management tools. Liquidity improvements could reduce ETH’s bid-ask spreads by 15-20% across major exchanges within three months.
