Nasdaq Files to Remove Position Limits on Bitcoin and Ethereum ETF Options

TLDR

• Nasdaq filed with the SEC to remove the 25,000-contract limit on options for Bitcoin and Ether ETFs from major issuers including BlackRock, Fidelity, and Grayscale
• The SEC waived the 30-day waiting period and made the rule change effective immediately on January 22, though it can still suspend the change within 60 days
• The change aims to treat crypto ETF options the same as other commodity-based fund options that have no position limits
• BlackRock’s Bitcoin ETF (IBIT) options currently rank 11th in US market open interest with over 5.3 million contracts
• The SEC will accept public comments and make a final decision by late February

Nasdaq has submitted a proposal to the Securities and Exchange Commission to eliminate trading restrictions on options tied to spot Bitcoin and Ether exchange-traded funds. The filing removes contract caps that previously limited how many options traders could hold.

The rule change affects options on Bitcoin and Ether ETFs from BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares, and VanEck. All products are listed on the Nasdaq exchange and were subject to a 25,000-contract limit.

Nasdaq filed the proposal on January 7. The SEC waived its standard 30-day waiting period and made the change effective on January 22.

The regulatory agency can still suspend the rule within 60 days if it decides further review is needed. A comment period is now open with a final determination expected by late February.

Options are contracts that give traders the right to buy or sell an asset at a set price before a specific date. Exchanges impose limits on options to reduce speculation risks and prevent market manipulation.

Nasdaq argues the change creates equal treatment across different asset classes. The exchange wants to handle digital assets the same way it handles all other qualifying options.

Regulatory Framework and Market Impact

The proposal builds on Nasdaq’s earlier approval in late 2025 to list options on single-asset crypto ETFs as commodity-based trusts. That approval allowed Bitcoin and Ether ETF options to trade but kept position and exercise limits in place.

Nasdaq stated the change promotes fair trading principles and supports an open market. The exchange claims the rule imposes no burden on competition and protects investors.

Similar changes are expected across other options exchanges. The uniform approach would standardize how crypto ETF options are treated compared to traditional commodity funds.

In November, Nasdaq had filed a separate proposal to raise position limits on BlackRock’s iShares Bitcoin Trust (IBIT) options from 250,000 contracts to 1 million. That filing cited growing demand and argued the cap limited hedging strategies.

Current Market Data

BlackRock’s Bitcoin ETF (IBIT) options currently rank 11th among US assets by options open interest. The fund has over 5.3 million in open interest according to OpenCharts data.

IBIT options rank below gold and silver ETFs in the current market environment. Bitcoin ETFs have seen outflows totaling $1.58 billion over the past three days.

BlackRock’s IBIT led withdrawals with $356.6 million in redemptions. Fidelity’s FBTC saw $287.7 million in outflows during the same period.

Bitcoin traded near $90,000 as of the latest data, up 1% in 24 hours. Ethereum also gained 1% to trade at $3,000 after falling more than 11% over the previous week.

The Nasdaq filing represents the latest step in expanding crypto market infrastructure. The exchange has been increasing its role in digital assets through various initiatives including tokenized equities and unified crypto indexes.

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