Nasdaq has officially filed a rule change with the Securities and Exchange Commission to remove position limits on options tied to spot Bitcoin and Ethereum exchange-traded funds. The proposal, effective immediately after the SEC waived its standard waiting period, eliminates the existing cap of 25,000 contracts for options linked to products from BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares, and VanEck. By aligning crypto ETF options with rules applied to other commodity-based funds, Nasdaq is signaling a major step toward normalizing digital asset derivatives within mainstream markets.
Options are financial contracts that grant traders the right to buy or sell an underlying asset at a set price before a specific date. Exchanges often impose position limits to mitigate the risk of excessive speculation and market manipulation, which can amplify volatility. Nasdaq’s move addresses these concerns by applying consistent treatment across all listed options, while still allowing the SEC to suspend the rule within 60 days if necessary.
This development follows Nasdaq’s late 2025 approval to list options on single-asset crypto ETFs as commodity-based trusts, a step that opened Bitcoin and Ethereum options trading but left existing position and exercise limits intact. Nasdaq has steadily expanded its role in crypto markets, including a November filing to raise limits on options tied to BlackRock’s iShares Bitcoin Trust from 250,000 to 1 million contracts, citing growing demand and constrained hedging capabilities.
The exchange has also been active in broader market initiatives, such as its January partnership with CME Group to unify crypto benchmarks under the Nasdaq-CME Crypto Index. This multi-asset index now tracks major digital currencies including Bitcoin, Ethereum, XRP, Solana, Chainlink, and Avalanche, reflecting Nasdaq’s ambition to establish comprehensive, institutional-grade market infrastructure for digital assets.
From a market perspective, removing position limits could enhance liquidity and allow more sophisticated trading strategies, including larger hedges and risk management for institutional participants. It also signals increasing regulatory confidence in treating crypto ETFs similarly to traditional commodity funds, which could encourage more mainstream adoption. Industry experts note that such changes may drive greater market participation and create more depth in crypto derivatives trading, while still safeguarding investors through ongoing SEC oversight.
Looking ahead, Nasdaq’s actions indicate a broader trend toward integrating digital assets into established financial markets. By leveling the regulatory playing field for crypto ETF options, the exchange is setting the stage for increased market efficiency and maturity, suggesting that Bitcoin and Ethereum derivatives may become a standard fixture in institutional portfolios in the coming years.
