Nasdaq Seeks SEC Approval to Lift Restrictions on Bitcoin ETF Options

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TLDR

Nasdaq has requested the SEC to remove options trading restrictions on Bitcoin and Ethereum ETFs.
The request aims to lift the current cap of 25,000 positions and exercise limits on cryptocurrency fund options.
Nasdaq believes that lifting the restrictions will create fairer market conditions for cryptocurrency ETFs.
The SEC is currently gathering public feedback and will decide by the end of February.
BlackRock has been purchasing Bitcoin and Ethereum, adding over $1 billion in digital assets.

Nasdaq has requested the U.S. Securities and Exchange Commission (SEC) to remove restrictions on options trading for Bitcoin and Ethereum exchange-traded funds (ETFs). The request, filed on January 21, aims to lift the current cap of 25,000 positions and exercise limits on options for cryptocurrency funds. Nasdaq argues that removing these restrictions would ensure fair trading rules for ETFs, including those managed by BlackRock, Grayscale, and others.

Nasdaq Requests SEC to Remove Trading Restrictions for Bitcoin ETFs

Nasdaq has filed a request with the SEC to ease current restrictions on options for Bitcoin ETFs. The exchange argues that lifting the cap would create fairer market conditions and align cryptocurrency ETFs with traditional funds. “This change would prevent unfair treatment of cryptocurrency funds and help maintain a level playing field in the market,” Nasdaq stated in its proposal.

The request affects BlackRock’s iShare Bitcoin Trust ETF (IBIT) and several other funds. Nasdaq has also highlighted that similar changes are likely to occur across other options exchanges if approved by the SEC. This move comes as Bitcoin-related assets have seen a rise in institutional investment.

SEC Collecting Feedback Before Making Final Decision

The SEC is currently gathering public feedback on the proposed changes. Once the comment period concludes, regulators are expected to make a final decision by the end of February. Nasdaq has requested that the SEC waive the usual 30-day waiting period to implement the new rules immediately.

Nasdaq’s request has generated interest, particularly as cryptocurrency-related assets are becoming more mainstream. The potential changes would impact several major funds, including those from Grayscale, Bitwise, and ARK21Shares. With increasing institutional involvement in the market, such regulatory adjustments are gaining attention.

In the meantime, BlackRock has been actively purchasing Bitcoin, capitalizing on recent price declines. The firm bought over 9,600 Bitcoin for approximately $878 million earlier this month, along with nearly 47,000 Ethereum. According to Lookonchain, BlackRock’s combined Bitcoin and Ethereum purchases amounted to more than $1 billion.