Nasdaq has formally submitted a rule change to the U.S. Securities and Exchange Commission (SEC), aimed at removing position and exercise limits on options associated with spot Bitcoin exchange-traded funds (ETFs). This initiative is seen as a significant step toward further integrating cryptocurrency-linked products into traditional derivatives markets.
The proposal, which was initially filed on January 7 and became effective this week on January 21, seeks to eliminate the existing cap of 25,000 contracts on options related to Bitcoin and Ethereum ETFs listed on Nasdaq.
According to the filing, the affected funds include offerings from BlackRock, Fidelity, Grayscale, Bitwise, ARK/21Shares, and VanEck.
The SEC has waived its typical 30-day waiting period, allowing the rule change to take immediate effect while retaining the authority to suspend it within 60 days should a further review be deemed necessary.
A public comment period is now open, with a final determination from the SEC anticipated by late February unless the rule is paused for additional evaluation.
In its argument, Nasdaq contended that the removal of these limits would enable crypto ETF options to be treated “in the same manner as all other options that qualify for listing,” thereby addressing perceived unequal treatment without compromising investor protections.
Furthermore, Nasdaq asserted that this change would enhance market efficiency while upholding safeguards against market manipulation and excessive risk.
Options are derivative contracts that provide traders the right, but not the obligation, to buy or sell an asset at a predetermined price prior to a specified expiration date. Position and exercise limits are generally imposed to prevent concentrated holdings that could exacerbate volatility or destabilize financial markets.
This filing builds upon Nasdaq’s approval in late 2025, which permitted the listing of options on single-asset crypto ETFs as commodity-based trusts. Although this decision allowed trading of Bitcoin and Ethereum ETF options on the exchange, the existing position limits remained in effect.
In recent years, Nasdaq has progressively expanded its engagement in cryptocurrency markets.
Nasdaq’s Bitcoin and Digital Asset Initiatives
In November, Nasdaq submitted a separate proposal seeking to raise position limits on options tied to BlackRock’s iShares Bitcoin Trust (IBIT) to as many as one million contracts, citing rising institutional demand and a growing use of options for hedging strategies.
Additionally, the exchange has ventured into crypto indexing and tokenization. In January, Nasdaq and CME Group announced plans to consolidate their crypto benchmarks under the Nasdaq-CME Crypto Index, which tracks major digital assets including Bitcoin, Ether, XRP, Solana, Cardano, and Avalanche.
If this latest rule change is permanently approved, it would signify a further normalization of Bitcoin derivatives within U.S. regulated markets, effectively blurring the distinctions between traditional financial instruments and crypto-native assets.
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