Nasdaq Seeks SEC Approval to Unshackle Crypto Derivatives

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). The move aims to treat these products in line with traditional commodity-based ETF options, such as gold or oil.

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

Nasdaq argues that removing the limits would improve market efficiency without introducing new systemic risk. The exchange also claims that oversight mechanisms, including surveillance-sharing agreements and clearinghouse risk management, are already sufficient.