Nasdaq Seeks Approval to Lift Limits on Crypto ETFs

Nasdaq has taken a major step toward expanding crypto-linked derivatives in the United States. The exchange has asked the U.S. Securities and Exchange Commission (SEC) for approval to remove long-standing restrictions on options trading tied to Bitcoin and Ethereum ETFs. 

If approved, the change will reshape how institutional and professional investors access crypto exposure through regulated markets.

Nasdaq Proposes Immediate Rule Change for BTC and ETH ETF Options

Nasdaq recently reported that it has proposed changes to its options position and exercise limits for Bitcoin and Ethereum ETF options listed on the exchange. 

The exchange is asking the SEC to allow these rule changes to take effect immediately, without the usual 30-day waiting period. The exchange argues that this update would align crypto ETF options with how options on other ETFs already operate.

The proposal directly impacts options tied to BlackRock’s iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA). It also raises limits for ETFs issued by other major asset managers, including Grayscale, Bitwise, Fidelity, ARK 21Shares, and VanEck.

Under current rules, options on these crypto ETFs face a strict cap of 25,000 contracts for both position and exercise limits. Nasdaq now plans to remove this cap entirely. 

Instead, these products would follow standard Nasdaq Options Market rules, just like equity and commodity-based ETF options. Nasdaq stated that the proposed rule change supports fair and equal trading principles. 

SEC Reviews Nasdaq’s Crypto Options Proposal as Demand Grows

In response to Nasdaq’s proposal, the SEC has opened the proposal to public comments and is expected to make a final decision by the end of February. The regulatory agency said it has already begun reviewing related proposals, including options tied to the Nasdaq Bitcoin Index.

This review comes as demand for crypto derivatives continues to grow. Options linked to BlackRock’s IBIT have gained strong traction. The investment product currently ranks 11th among U.S. assets with the highest options open interest. 

Data from OpenCharts shows over 5.3 million open contracts, meaning big institutions are still active in the market. However, options tied to IBIT are not as popular as those for gold and silver ETFs. This shows that many investors are moving toward safer assets and being more careful.

Bitcoin ETFs See Massive Outflows, but Bitcoin Remains Stable

Meanwhile, massive funds are leaving spot Bitcoin ETFs. Most recently, $1.58 billion was reportedly withdrawn from the crypto funds. BlackRock’s IBIT saw the biggest outflow at $356.6 million, followed by Fidelity’s FBTC with $287.7 million.

These trends suggest large investors are cutting back on risk because of uncertain market news and higher price swings. Even so, Bitcoin is still trading close to $90,000. It is up nearly 1% in the past 24 hours, moving between $87,231 and $90,430.

Ethereum has also risen by about 1% and is trading near $3,000. This comes after a steep weekly drop of over 11%, showing the recent pressure across crypto markets.