Nasdaq has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) seeking the removal of existing position and exercise limits on options linked to Bitcoin exchange-traded funds (ETFs). The aim is to further integrate cryptocurrency-related products into traditional derivatives markets. Specifically, Nasdaq has requested the elimination of the 25,000-contract cap on Bitcoin and Ethereum ETF options currently listed on its platform. Affected products include those from BlackRock, Fidelity, Grayscale, Bitwise, ARK/21Shares, and VanEck. The SEC has waived its usual 30-day review period and made the change immediately effective, while retaining the authority to suspend it within 60 days if further review is needed.
This proposal intends to place crypto ETF options on equal footing with other traditional options, eliminating discriminatory treatment while maintaining investor protections. Nasdaq believes this change will enhance market efficiency and preserve safeguards against excessive risk and market manipulation. Options grant buyers the right, but not the obligation, to purchase or sell an asset at a predetermined price before a specified date. Position and exercise limits are typically imposed to prevent abnormal price volatility or instability caused by excessive trading volumes.
Last year, Nasdaq also proposed increasing position limits for Bitcoin ETF options, including a request for up to one million contracts for BlackRock’s iShares Bitcoin Trust, reflecting growing institutional interest in digital assets. To expand its footprint in the crypto market, Nasdaq has ventured into crypto indexing and tokenization, recently partnering with CME Group to launch the Nasdaq-CME Crypto Index, covering major digital assets such as Bitcoin, Ether, XRP, Solana, Cardano, and Avalanche.
If permanently approved, this proposal would mark a significant step toward normalizing Bitcoin derivatives within regulated U.S. markets, narrowing the gap between traditional financial instruments and crypto assets.
Source: bitcoinmagazine
