2024-19773. Self-Regulatory Organizations; NYSE American LLC; Notice of Filing of Proposed Rule Change To Amend Rule 915 to Permit the Listing and Trading of Options on Bitcoin ETFs

Bitcoin fund	Shares outstanding
Fidelity Fund	201,100,100
ARK 21Shares Fund	45,495,000
Invesco Fund	7,965,000
Franklin Fund	11,100,000
VanEck Fund	9,600,000
WisdomTree Fund	1,420,000
Grayscale Fund	296,930,100
Grayscale Mini Fund	353,580,100
Bitwise Fund	69,910,000
iShares Fund	606,120,000
Valkyrie Fund	31,335,000

All but one Bitcoin Fund had more than 7,000,000 shares outstanding, which is the minimum number of shares of a corporate stock that the Exchange generally requires to list options on that stock pursuant to Commentary .01(1) to Rule 915. However, the Exchange believes shares outstanding ( i.e., free float ^[12] ), while commonly used to determine investable capacities of corporate stocks, the figure has little utility with respect to ETFs due to the market structure of ETFs. Proofing of ETF baskets, in addition to the efficiency of creation/redemption mechanisms, decouple concepts of “floating” ETF shares against the impacts of ETF liquidity to the liquidity of ETF constituents. While ETF Market Makers may often limit the amount of floating ETF shares, primary market mechanisms enable virtually limitless capacity to create and redeem ETF shares on a daily basis.^[13] As evidenced during their time in market since beginning trading in January of 2024, the gross value of daily shares created or redeemed for each Bitcoin Fund exceeds the assets under management (“AUM”) of each fund as of August 7, 2024, which was as follows:

Bitcoin fund	AUM
Fidelity Fund	10,240,420,000
ARK 21Shares Fund	2,887,759,000
Invesco Fund	405,628,500
Franklin Fund	339,882,800
VanEck Fund	617,779,500
WisdomTree Fund	81,690,950
Grayscale Fund	20,117,590,000
Grayscale Mini Fund	1,908,524,806
Bitwise Fund	2,266,633,000
iShares Fund	18,274,490,000
Valkyrie Fund	527,831,700

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As a result, the Exchange believes this demonstrates that each Bitcoin Fund is characterized by a substantial number of outstanding shares.

Further, the below table contains information regarding the number of beneficial holders of certain Bitcoin Funds as of the specified dates:

Bitcoin fund	Beneficial holders	Date
Fidelity Fund	279,656	6/27/2024
ARK 21Shares Fund	69,425	6/26/2024
Invesco Fund	13,420	6/25/2024
Franklin Fund	12,224	6/27/2024
VanEck Fund	19,061	6/28/2024
WisdomTree Fund	3,509	7/2/2024

As this table shows, each of these six Bitcoin Funds has more than 2,000 beneficial holders, which is the minimum number of holders the Exchange generally requires for corporate stock in order to list options on that stock pursuant to Commentary .01(2) to Rule 915. Given that the other four Bitcoin Funds have significant trading volumes similar to the trading volumes of the Bitcoin Funds listed in the table above (as discussed below), the Exchange believes it is reasonable to expect that shares of all of the Bitcoin Funds are characterized by a substantial number of outstanding shares that are widely held.

The Exchange also believes each Bitcoin Fund is characterized by a substantial number of outstanding shares that are actively traded. As of August 7, 2024, the total trading volume (by shares and notional) for each fund since they began trading on January 11, 2024, and the average daily volume (“ADV”) over the 30-day period of July 9 through August 7, 2024 for each Bitcoin Fund was as follows:

Bitcoin fund	Trading volume (shares)	Trading volume (notional $)	ADV (shares)
Fidelity Fund	1,490,261,825	78,936,647,100.20	6,014,335.50
ARK 21Shares Fund	413,159,977	24,787,148,013.81	1,893,335.00
Invesco Fund	78,609,595	4,578,462,838.89	299,372.94
Franklin Fund	58,954,975	2,063,321,834.88	338,901.56
VanEck Fund	59,991,039	4,195,401,686.66	265,605.84
WisdomTree Fund	39,977,866	2,546,889,570.58	209,501.33
Grayscale Fund	2,074,101,826	95,371,791,353.17	4,794,193.00
Bitwise Fund	455,817,104	14,926,192,896.43	2,250,989.25
iShares Fund	5,209,443,211	185,451,676,432.50	28,406,964.00
Valkyrie Fund	100,580,329	1,762,278,782.37	349,587.41