Nasdaq Pushes SEC to Unshackle Bitcoin and Ethereum Options

Nasdaq has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to remove position limits on options tied to spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs). This move aims to align crypto-linked derivatives with traditional products, such as commodity-based ETF options.

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

Nasdaq argues that removing limits would improve market efficiency without introducing new systemic risk. The proposal includes options on ETFs issued by firms such as BlackRock, Fidelity, Ark Invest, VanEck, Grayscale, and Bitwise.