Nasdaq Seeks to Unshackle Crypto Derivatives with SEC Rule Change Proposal

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 current 25,000-contract cap was introduced when crypto ETFs were new and untested, but market conditions have since evolved. Nasdaq argues that trading volumes, assets under management, and price discovery in the underlying ETFs have reached levels that support larger and more sophisticated options activity.

The proposal seeks to treat options on spot Bitcoin and Ethereum ETFs in line with options linked to commodities such as gold or oil. If approved, it would allow larger options positions tied to ETFs issued by firms including BlackRock, Fidelity, Ark Invest, VanEck, Grayscale, and Bitwise.

The decision squarely places the SEC's regulatory stance on crypto-linked ETF options under scrutiny. Nasdaq argues that oversight mechanisms, including surveillance-sharing agreements and clearinghouse risk management, are already sufficient.