SEC Rule Change Could Spark Crypto Derivatives Boom
Nasdaq has asked the U.S. Securities and Exchange Commission to approve a rule change that would remove position limits on options tied to spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds.
The current 25,000-contract cap applies to options on crypto ETFs, but Nasdaq argues these products now meet the same liquidity, market capitalization, and surveillance standards as other commodity-based ETF options.
According to the filing, existing limits were introduced when crypto ETFs were new and untested. However, trading volumes, assets under management, and price discovery in the underlying ETFs have since evolved, supporting larger and more sophisticated options activity.
The proposal would allow larger options positions tied to ETFs issued by firms including BlackRock, Fidelity, Grayscale, and others. This move could significantly expand institutional participation in crypto-linked derivatives markets.