SEC Approves Nasdaq Rule Change to Remove Limits on Bitcoin ETF Options

• SEC removed special limits on Bitcoin ETF options, treating them like regular ETF options.
• This boosts liquidity and makes institutional trading easier.

The U.S. Securities and Exchange Commission (SEC) has approved a rule that removes the special restriction on the options trading linked to Bitcoin ETFs on the Nasdaq Options Market. The decision was published under SEC Release No.34-104649 on January 21, 2026.

How the New Rule Changes Bitcoin ETF Options

Before the New rule change, options on the spot Bitcoin ETFs were treated as a restricted category. They were subject to tighter position and exercise limits than most other ETF options. Now, under the new rule, Spot Bitcoin ETFs are treated like the standard commodity-based ETFs. Bitcoin ETF options are now coming under the same framework used for oil, gold, and other commodities.

The SEC approval applies to options trading on ishares Bitcoin Trust, the Grayscale Bitcoin trust and the Bitwise Bitcoin ETF. These funds now operate under the same option rules as other large ETFs traded on U.S. Exchanges.

Reason Behind the SEC’s Accelerated Approval

Normally, SEC-approved rule changes include a 30-day waiting period before taking effect. But in this case, the SEC removed the waiting period and allowed the rule to take effect immediately. Nasdaq has argued that a delay would place the Bitcoin ETF options at a disadvantage compared with the other high-volume ETF options. The SEC agreed and allowed the changes to take effect immediately.

This change is important for institutional investors such as hedge funds, asset managers, and market makers. When the limits are higher, then they can buy and sell larger positions without pushing the prices. This makes it easy for them to protect their investment and manage risk. This improves liquidity, and trading becomes smoother. 

This decision shows the broader shift in U.S. regulators viewing the digital assets. SEC is now focusing on setting the rules more quickly and regulating crypto as the traditional financial markets, instead of responding after the problem arises. 

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