Nasdaq To Remove Position Limits On Bitcoin ETF Options

Nasdaq has recently made a significant move in the world of cryptocurrency by filing a rule change with the U.S. Securities and Exchange Commission. The proposed change aims to remove position and exercise limits on options tied to spot Bitcoin exchange-traded funds, signaling a further integration of crypto-linked products into traditional derivatives markets.

The proposal, which was originally filed on Jan. 7 and recently made effective on the 21st, seeks to eliminate the current 25,000-contract cap on options linked to Bitcoin and Ethereum ETFs listed on Nasdaq. This change would impact funds from major players in the industry such as BlackRock, Fidelity, Grayscale, Bitwise, ARK/21Shares, and VanEck.

The SEC has waived its standard 30-day waiting period for this rule change, allowing it to take effect immediately. However, the SEC still retains the authority to suspend the change within 60 days if further review is deemed necessary. A public comment period is now open, with a final SEC determination expected by late February unless the rule is paused.

Nasdaq has argued that lifting the limits on crypto ETF options would allow them to be treated in the same manner as all other options that qualify for listing. The exchange believes that this change would eliminate unequal treatment without compromising investor protections. Additionally, Nasdaq claims that this move would support market efficiency while still maintaining safeguards against manipulation and excessive risk.

Options are derivative contracts that give traders the right, but not the obligation, to buy or sell an asset at a predetermined price before a set expiration date. Position and exercise limits are typically imposed to prevent concentrated positions that could amplify volatility or destabilize markets.

This filing builds on Nasdaq’s previous approval in late 2025 to list options on single-asset crypto ETFs as commodity-based trusts. While that decision allowed Bitcoin and Ethereum ETF options to trade on the exchange, existing position limits remained in place.

In recent years, Nasdaq has been steadily expanding its involvement in crypto markets. In November, the exchange filed a separate proposal to raise position limits on options tied to BlackRock’s iShares Bitcoin Trust (IBIT) to as much as one million contracts. This move was driven by growing institutional demand and increased use of options for hedging strategies.

Furthermore, Nasdaq has ventured into crypto indexing and tokenization. In January, Nasdaq and CME Group announced plans to unify their crypto benchmarks under the Nasdaq-CME Crypto Index, which tracks major digital assets including Bitcoin, Ether, XRP, Solana, Cardano, and Avalanche.

If the latest rule change is approved permanently, it would mark another significant step toward normalizing Bitcoin derivatives within U.S. regulated markets. This move further blurs the line between traditional financial instruments and crypto-native assets, highlighting the continued evolution of the cryptocurrency industry.