October 13 Deadline: SEC’s Final Appeal Opportunity in Grayscale Case and Pending ETF Responses

The options market has been buzzing with anticipation as the U.S. Securities and Exchange Commission (SEC) faces critical deadlines for key cryptocurrency exchange-traded fund (ETF) decisions. As reported by the New York Digital Investment Group (NYDIG) blog, October 13 marks the final day for the SEC to appeal the Grayscale case decision. Additionally, the SEC must respond to the Bitwise Bitcoin ETP Trust before October 16 and provide a response, be it approval, denial, or delay, to Nasdaq’s request to list the iShares Bitcoin Fund by October 17.

Amid this regulatory uncertainty, a sharp increase in forward volatility has gripped the options market, pointing towards traders’ expectations of significant movements in cryptocurrency spot prices around these key ETF decision dates.

The forward volatility, specifically of at-the-money (ATM) options during the mid-October period, aligning with the SEC’s response window for the BlackRock iShares Bitcoin Trust ETF, has surged dramatically. From October 13, 2023, to October 20, 2023, forward volatility has surged by 9.6 points. This increase suggests that the market is bracing for a potential 5.5% single-day swing in the underlying spot price of Bitcoin during that critical window.

Historically, the SEC has maintained a tendency to withhold its decisions until just days before the deadlines, even though technically, it can respond at any time leading up to the due dates. This practice contributes to the mounting uncertainty in the cryptocurrency market, particularly for traders who are eagerly awaiting these pivotal decisions.

Of paramount importance is the October 13 deadline, the final date for the SEC to appeal the Grayscale case decision. This particular decision could offer crucial insights into the regulatory agency’s stance on spot ETFs and its approach to the rapidly evolving cryptocurrency market.

The increased volatility in the options market around these upcoming dates is indicative of the heightened anticipation and uncertainty prevailing in the cryptocurrency sector. Traders are gearing up for potential price swings, and the decisions from the SEC will likely have a substantial impact on the cryptocurrency market as a whole.

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