Nasdaq ISE has proposed a significant expansion of trading limits for options on BlackRock’s iShares Bitcoin Trust, signaling the cryptocurrency’s accelerated integration into mainstream finance alongside traditional assets.
The proposal to the U.S. Securities and Exchange Commission (SEC) seeks to quadruple the current trading limit from 250,000 contracts per side to 1 million contracts.
This move would place options for the Bitcoin exchange-traded fund (ETF) on par with major global benchmarks such as the iShares MSCI Emerging Markets ETF (EEM) and the iShares China Large-Cap ETF (FXI) in terms of liquidity, according to CoinDesk.
Nasdaq ISE also aims to remove all position and exercise limits for physically settled FLEX options on IBIT. FLEX options are favored by large funds for customized hedging strategies and structured exposures.
This aligns IBIT’s regulatory treatment with commodity-based ETFs like the SPDR Gold Trust (GLD), further cementing Bitcoin’s equivalence to gold in the derivatives market.
The exchange cited rapidly increasing institutional interest in regulated Bitcoin products as the driving force behind the proposed changes. The current limits restrict activity for market makers and institutional desks that utilize derivatives for hedging and yield generation.
Nasdaq ISE anticipates continued growth in ETF option volumes throughout 2025. The proposal, published in the U.S. Federal Register, includes comparative analyses of IBIT’s market capitalization, average daily trading, and overall liquidity.
The exchange argues these metrics are adequate to justify the higher derivatives trading category. Nasdaq ISE also assured regulators that even if positions of 1 million contracts were fully exercised, the impact on the broader market would be minimal.
Such a position would represent approximately 7.5% of IBIT’s float and just 0.284% of the total circulating Bitcoin. This magnitude, the exchange stated, mitigates significant risk to the underlying market.
This proposal comes as IBIT has surpassed Deribit as the leading venue for open interest in Bitcoin options.
The trend reflects Bitcoin’s rapid incorporation into institutional strategies for hedging, arbitrage, and yield generation. This is largely spurred by the availability of regulated products in U.S. financial markets.
The SEC is currently seeking public comments on Nasdaq ISE’s proposed rule change. Market observers are closely monitoring the regulator’s decision, which could substantially expand operational capacity for investors trading Bitcoin ETF derivatives.