ETH ETFs down more than 50% YTD, with limited inflows.
Two -2x ETH ETFs are 2025’s best-performing funds.
Nasdaq ISE filed for ETHA options listing in July 2024.
The US Securities and Exchange Commission (SEC) has officially approved options trading on several spot Ethereum ETFs, marking a significant development for institutional investors seeking hedging strategies in the crypto market.
The green light, announced through multiple filings on Wednesday, applies to BlackRock’s iShares Ethereum Trust (ETHA), Bitwise Ethereum ETF, Grayscale’s Ethereum Trust, and Ethereum Mini Trust.
This move comes as the SEC balances concerns around volatility with the demand for sophisticated investment tools in the fast-evolving digital asset sector.
Ethereum’s price has since surged over 12%, supported in part by broader macroeconomic developments including a temporary US tariff freeze.
ETF options approval opens new strategies
The approval enables investors to trade options contracts linked to ETH ETFs, allowing for more nuanced strategies like covered calls, buffers, and risk-managed hedges.
Options are derivatives that allow the purchase or sale of the underlying ETF at a predetermined price within a fixed time period.
This decision follows Nasdaq ISE’s July 22, 2024, filing to list options on BlackRock’s ETHA, a move that was initially delayed.
The SEC had a deadline of April 9 to respond, and its eventual approval now matches the precedent set in October 2023, when options trading was approved for 11 spot Bitcoin ETFs across NYSE American, Nasdaq, and Cboe.
The SEC’s approval notice stated that the options would offer investors a lower-cost way to gain exposure to Ether’s price movements.
It also mentioned that options would provide a flexible vehicle for those holding ETH ETFs or related positions to manage their exposure efficiently.
ETH ETFs post over 50% losses YTD
While the options approval has sparked renewed interest in Ethereum, the performance of ETH ETFs remains subdued.
According to Farside Investors, these ETFs are down more than 50% year-to-date, with inflows recorded on just four trading days since February 20.
Despite this weak performance, leveraged products have emerged as strong gainers.
Two -2x Ethereum ETFs—designed to short ETH ETF performance with double leverage—are currently the top-performing exchange-traded products in 2025, according to Bloomberg’s ETF analyst Eric Balchunas.
This indicates that investors are actively positioning around Ether volatility, not merely relying on bullish sentiment.
ETH jumps 14% on dual market triggers
The Ethereum market responded quickly to Wednesday’s regulatory shift. ETH jumped by over 12% in 24 hours, trading at $1,617 at the time of writing, according to CoinMarketCap.
This upward movement is also being attributed to a temporary pause in US tariffs announced by former President Trump, a policy that analysts believe has eased short-term macroeconomic tensions.
The rally demonstrates how both regulatory and geopolitical decisions are increasingly shaping crypto asset prices.
While the ETH ETF options approval provided a structural boost, the market also reacted to external non-crypto news that reduced uncertainty in the global trading environment.
More ETH funds expected in 2025
The options approval is also setting the stage for a wider rollout of Ethereum-related ETF products.
Nate Geraci, president of the ETF Store, noted via X (formerly Twitter) that the market should expect a variety of new ETH ETF launches in the near term, including covered call and buffer strategies.
Bloomberg’s ETF expert James Seyffart echoed the sentiment that the SEC’s approval was “100% expected” given the earlier precedent set with Bitcoin ETF options.
Still, watchdog groups like Better Markets have expressed concern, previously urging the SEC to delay such approvals due to the high volatility and speculative nature of the assets.
With institutional interest growing, the SEC’s cautious but consistent approach indicates a broader move toward mainstreaming crypto asset classes through regulated investment vehicles.
