Nasdaq has filed a rule change with the United States Securities and Exchange Commission (SEC) to eliminate limits on options related to Bitcoin and Ether exchange-traded funds (ETFs). This move aims to ensure equity in the treatment of crypto ETF options similar to those for other commodities.
The proposal, made effective on January 7, abolishes the existing 25,000-contract cap on options for various Bitcoin (BTC) and Ether (ETH) ETFs available on Nasdaq. Major firms such as BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares, and VanEck are involved, as stated in the filing.
The SEC has waived the usual 30-day waiting period, enabling immediate implementation of the rule, though it may review and potentially suspend it within 60 days if necessary.
Options are contracts that allow traders to buy or sell an asset at a predetermined price prior to a specific date. Exchanges and regulators often impose trading limits on options to mitigate risks related to speculation, market manipulation, and potential volatility.
US SEC notice on rule change removing restrictions on certain crypto assets. _Source: US SEC
Nasdaq argues that this adjustment ensures that digital assets are treated equally with other options eligible for listing, which will promote fairness without sacrificing investor protections.
A comment period on the proposal is now open, with a decision expected by late February unless delayed for additional review.
This filing follows Nasdaq’s recent approvals to list options on individual crypto ETFs as commodity-based trusts, which allowed trading of Bitcoin and Ether ETF options on the platform but kept existing restrictions intact.
Nasdaq’s Growing Influence in Crypto
Over the last few months, Nasdaq has increasingly engaged in the crypto sector, from advocating for tokenized assets to easing derivative trading regulations on Bitcoin ETFs.
In November, the exchange sought to increase position limits for options linked to BlackRock’s iShares Bitcoin Trust from 250,000 to 1 million, citing rising demand and claiming that existing limits hinder hedging and trading strategies.
Nasdaq’s head of digital asset strategy, Matt Savarese, indicated the company’s commitment to swiftly navigate through the SEC’s review process for tokenized versions of its listed stocks to meet market needs.
In January, Nasdaq and CME Group unveiled their plan to merge crypto benchmarks, rebranding the Nasdaq Crypto Index to the Nasdaq-CME Crypto Index, tracking significant cryptocurrencies like BTC, ETH, and others.
Nasdaq operates as a significant U.S. exchange for equities, derivatives, and exchange-traded products, primarily focusing on technology and growth-centric companies.
