Nasdaq Files With SEC To Remove 25,000-Contract Limits On Spot Bitcoin And Ether ETF Options

Nasdaq filed a rule change with the U.S. Securities and Exchange Commission to remove limits on options tied to spot Bitcoin and Ether exchange-traded funds, aiming to align crypto derivatives with traditional commodity-based funds. The proposal, dated January 7, would lift the 25,000-contract cap on options linked to spot Bitcoin and Ether ETFs listed on Nasdaq, including products from BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares and VanEck. The SEC waived its typical 30-day waiting period, allowing the change to take effect immediately while preserving authority to suspend the change within 60 days. Nasdaq said the change would allow the exchange to treat digital assets “in the same manner as all other options that qualify for listing.”

“Nasdaq has submitted a rule change to the U.S. Securities and Exchange Commission aimed at removing caps on options tied to spot Bitcoin and Ether ETF options”

KuCoin

A separate SEC advisory issued on January 21 described the rule filing submitted on January 7 and said the proposed rule change has become effective, removing the existing 25,000-contract position and exercise limits on options underlying specific bitcoin- and ethereum-linked ETFs. The advisory also states that the SEC “hereby waives the 30-day operative delay and designates the proposal as operative upon filing,” while clarifying the Commission retains supervisory authority after the rule takes effect. The SEC opened a public comment period, with a final determination expected by late February unless the rule is paused. Nasdaq President Tal Cohen framed the broader regulatory shift at Consensus in Miami, saying, “The gray zone now is we can build. We can gain some scale. We can experiment without maybe any brush back.”

The rule change would expand options trading capacity for bitcoin- and ethereum-linked ETF products named in the filing, including BlackRock’s iShares Bitcoin Trust ETF and the iShares Ethereum Trust ETF, along with Fidelity, Grayscale, Bitwise, ARK21Shares and VanEck. Nasdaq argued that lifting the limits would eliminate unequal treatment by treating crypto ETF options “in the same manner as all other options that qualify for listing,” while the SEC’s advisory tied the immediate effectiveness to conclusions related to investor protection, competition, and timing requirements. The SEC retained the ability to suspend the rule within 60 days if it determines action is necessary in the public interest, for the protection of investors, or to pursue the objectives of the Securities Exchange Act. In parallel, Nasdaq’s broader crypto push includes efforts to converge traditional market infrastructure with digital asset systems, with Cohen saying, “We’re embracing two trends,” “Always on market infrastructure” and “convergence” between traditional financial rails and digital asset systems.

“Nasdaq argued that lifting the limits would allow crypto ETF options to be treated “in the same manner as all other options that qualify for listing,””

Bitcoin Magazine