BlackRock, Fidelity, Grayscale: Why Nasdaq's SEC Rule Change Could Trigger A Crypto Derivatives Boom

Nasdaq has formally asked the U.S. Securities and Exchange Commission to approve a rule change that would remove long-standing position and exercise limits on options tied to spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds, a move that could significantly expand institutional participation in crypto-linked derivatives markets.

In a filing submitted to the SEC earlier this week, Nasdaq proposed eliminating the current 25,000-contract cap that applies to options on crypto ETFs.

The exchange argues that these products now meet the same liquidity, market capitalization, and surveillance standards as other commodity-based ETF options and should therefore be regulated under the same framework.

Push To Align Crypto ETF Options With Traditional Products

Nasdaq’s proposal seeks to treat options on spot Bitcoin and Ethereum ETFs in line with options linked to commodities such as gold or oil.

According to the filing, the existing limits were introduced when crypto ETFs were new and untested, but market conditions have since evolved.

The exchange said trading volumes, assets under management, and price discovery in the underlying ETFs have reached levels that support larger and more sophisticated options activity.