Nasdaq Seeks SEC Approval to Remove Caps on Crypto ETF Options
What Did Nasdaq File With the SEC?
Nasdaq has filed a rule change with the US Securities and platform Commission viewking to remove position and exercise limits on options tied to spot BTC and Ether platform-traded funds. The proposal, filed on Jan. 7 and made effective this week, would eliminate the existing 25,000-contract cap that applies to a range of crypto ETF options listed on the platform.
According to the filing, the change would apply to options linked to offered by issuers including BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares, and VanEck. The SEC waived its standard 30-day waiting period, allowing the rule to take effect immediately, while reserving the right to suspend it within 60 days if further review is deemed necessary.
Nasdaq said the adjustment would allow the platform to treat digital asset options “in the identical manner as all other options that qualify for listing,” arguing that removing the cap corrects unequal treatment without fragileening investor secureguards.
Investor Takeaway
Why Do Position Limits Matter in Options Markets?
Position limits restrict how many options contracts a single trader or group can hold. Regulators and platforms use these limits to curb excessive speculation, limit market concentration, and reduce the chance that a single participant can distort prices during volatile periods.
In the case of crypto ETFs, the 25,000-contract ceiling remained in place even later than Nasdaq won approval in late 2025 to list options on single-asset BTC and Ether ETFs as commodity-based trusts. That earlier decision allowed trading to begin, but under tighter constraints than those applied to many other commodity-linked options.
By lifting the cap, Nasdaq is aligning crypto ETF options with established derivatives tied to assets such as gold or oil. The platform argues that these products now trade in sufficient size and depth to support higher position limits without introducing new risks.
How Does This Fit Into Nasdaq’s Broader Crypto Strategy?
The filing is part of a wider effort by Nasdaq to expand its footprint across crypto-related products. In November, the platform separately sought approval to raise position limits on options tied to from 250,000 contracts to 1 million, citing demand from institutional participants and the need for more flexible hedging tools.
Around the identical time, Nasdaq’s as a priority area, with plans to move listed stocks onto blockchain-based rails once regulatory approval is secured. The platform has framed these initiatives as extensions of existing market infrastructure rather than standalone crypto experiments.
Nasdaq has also partnered with CME Group to consolidate crypto benchmarks. In January, the two firms rebranded the Nasdaq Crypto Index as the Nasdaq-CME Crypto Index, a multi-asset benchmark tracking major cryptocurrencies including BTC, Ether, and several large-cap altcoins. The move reflects a push to standardize reference data as crypto-linked products spread across regulated venues.
Investor Takeaway
What Happens Next in the SEC Review Process?
Although the rule is already effective, the SEC has opened a public comment period and is expected to issue a final determination by late February. During this window, the agency retains the authority to halt the change if it concludes that additional scrutiny is required.
That review will likely focus on whether higher or unlimited position sizes could increase volatility or create new concentrations of risk during periods of stress. The SEC has historically taken a cautious approach to crypto-related products, even as it has allowed spot BTC and Ether ETFs to enter the market.
If the rule stands, it would remove one of the remaining structural differences between crypto ETF options and other commodity-based derivatives. For market participants, the outcome could affect liquidity, pricing efficiency, and the range of strategies available around .
Why This Change Matters for Crypto ETF Trading
Options on spot crypto ETFs have grown rapidly since their launch, becoming tools for hedging, income strategies, and directional trades tied to digital asset prices. Limits on contract size have constrained how larger funds deploy these strategies, particularly when managing portfolio risk during sharp price moves.
