Nasdaq Lifts Position Limits on Bitcoin, Ethereum ETF Options

Nasdaq has submitted a rule change to the SEC, effective January 7, removing position limits on Bitcoin and Ethereum options contracts linked to spot ETFs.

This change aligns digital asset options with commodity ETFs, potentially enhancing liquidity and market access without compromising investor protections, pending final SEC approval or suspension.

Nasdaq Elevates Bitcoin, Ethereum ETFs to Commodity Standards

Nasdaq has submitted a rule change to the SEC to eliminate position limits on options tied to Bitcoin and Ethereum ETFs, effective immediately. This aligns the treatment of these digital assets with other options, aiming for consistency without affecting investor protection.

The rule change impacts how options on specific Bitcoin and Ethereum ETFs are managed, potentially increasing trading volumes and liquidity for these assets. The SEC’s decision to waive the typical 30-day review suggests strong regulatory confidence in market stability. “The removal of these limits indicates a matured understanding and robust infrastructure to support digital asset growth in line with traditional commodities,” as noted in the SEC filing.

Market responses have emphasized the importance of this alignment in fostering equal treatment across asset classes. Notably, regulatory bodies have underscored readiness to suspend the rule change within 60 days if concerns emerge.

Bitcoin Market Dynamics Amid Regulation Changes

Did you know? Even before the limits were lifted, BlackRock’s iShares Bitcoin Trust held significant options interest, highlighting institutional confidence.

Bitcoin (BTC), a key asset in this move, currently trades at $88,861.56 with a market cap exceeding $1.78 trillion. It dominates 59.13% of the market, according to CoinMarketCap. Despite a 1.18% drop in the last 24 hours, it shows a three-month decline of 20.28%, reflecting its volatility.

Experts from Coincu suggest that removing position limits could increase liquidity and trading activity, signaling regulatory trust in the sector. This enhances market depth and may lead to more innovative financial products involving digital asset derivatives, which aligns with broader exchange objectives.