Nasdaq Aims to Unshackle Crypto Options from 25,000-Contract Cap

Nasdaq has submitted a rule change proposal to the U.S. Securities and Exchange Commission (SEC) that could significantly expand institutional participation in crypto-linked derivatives markets.

The exchange argues that options tied to spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds meet the same liquidity, market capitalization, and surveillance standards as other commodity-based ETF options and should be regulated under the same framework.

The current 25,000-contract cap on options for crypto ETFs was introduced when these products were new and untested, but market conditions have since evolved with trading volumes, assets under management, and price discovery reaching levels that support larger and more sophisticated options activity.

If approved, the change would allow larger options positions tied to ETFs issued by firms including BlackRock, Fidelity, Ark Invest, VanEck, Grayscale, and Bitwise.