Nasdaq's International Securities Exchange wants BlackRock's iShares Bitcoin Trust (NASDAQ:IBIT) to be treated like Apple Inc (NASDAQ:AAPL), Nvidia Corp (NASDAQ:NVDA) and the SPDR S&P 500 ETF (NYSE:SPY). And it's making no secret of it, a new filing with the U.S. Securities and Exchange Commission on November 21 asks regulators to raise IBIT's options position limits from 250,000 contracts to a million.
If approved, IBIT would join the same elite tier as mega-cap equities and the largest index ETFs—a milestone for a product that only debuted in January 2024. More importantly, it would underscore how Bitcoin exposure is transitioning from a “risk-on curiosity” to a core institutional tool.
A Bigger Arena For Institutions
Nasdaq is arguing that the current cap “restricts” traders from putting on legitimate hedging and risk-managed strategies. Analysts said an increased limit would give market makers and structured-product desks room to build sizable exposures, deepen liquidity, and tighten spreads.
“This will allow institutions to build more interesting structured products for IBIT,” said Lai Yuen of Fisher8 Capital, cited by Decrypt, noting the move should support long-term ETF flows. This is also Nasdaq’s second request for expanded limits in under a year-an unspoken signal that demand for Bitcoin derivatives is growing faster than the framework built to govern it.
The exchange is also requesting an exemption to remove limits entirely for customized physically delivered FLEX options. That could reduce activity in relatively opaque over-the-counter markets and push the activity into more transparent, exchange-based venues.
Ripple Effects For Rival Bitcoin ETFs
While the proposal is IBIT-specific, experts expect the broader spot Bitcoin ETF lineup to benefit. Greater derivatives capacity around the category leader tends to make Bitcoin ETFs more usable for allocation-focused investors—especially those who rely on paired hedges or volatility overlays. Research from NYDIG, as cited by CoinDesk, suggests higher Bitcoin-ETF options limits may lower volatility and boost spot-ETF demand, making Bitcoin more investable for institutional portfolios.
In all, the Grayscale Bitcoin Trust (NYSE:GBTC), ARK 21Shares Bitcoin ETF (BATS:ARKB), and Bitwise Bitcoin ETF (NYSE:BITB) could see incremental flows as more institutions warm up to a derivatives-supported ETF ecosystem. While GBTC still captures tactical traders, ARKB and BITB, popular active crypto allocators, may also benefit if structured-product desks begin designing trades across multiple spot ETFs instead of only IBIT.
Expanded IBIT options could also pressure issuers and exchanges to pursue similar frameworks for rival ETFs over time.
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