Nasdaq Moves to Raise Trading Limits on Options Leading Bitcoin ETF

Nasdaq’s International Securities Exchange is seeking approval to sharply increase the daily trading cap on options linked to BlackRock Inc.’s iShares Bitcoin Trust ETF, responding to surging demand from market participants.

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In a filing released Wednesday, the Securities and Exchange Commission disclosed that the exchange wants to boost the current 250,000-contract daily limit on the ETF which trades under the ticker IBIT to as many as 1 million contracts.

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According to the filing, Nasdaq emphasized that the proposed position and exercise limits for IBIT options are aligned with those already in place for similar iShares products, including the iShares MSCI Emerging Markets ETF, the iShares China Large-Cap ETF, and the iShares MSCI EAFE ETF. This framing suggests that the exchange sees IBIT as having matured enough to fall under the same regulatory structure as other established equity and international funds.

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Tim Sun, senior researcher at Hashkey Group, noted that Nasdaq’s push to expand IBIT’s limits reflects more than just higher volumes. It highlights a broader evolution in how traders interact with Bitcoin-related instruments. The proposal “signals significant demand for hedging tools, more robust risk-management options, and increasingly sophisticated trading strategies,” he said.

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The move represents Nasdaq’s second attempt to widen the ETF’s contract ceiling. Shortly after IBIT options received regulatory approval earlier this year, the exchange sought to raise the limit tenfold from 25,000 to 250,000 contracts as trading interest accelerated at an unexpected pace. The SEC signed off on that change in July, allowing activity to scale quickly across the market.

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Since then, IBIT has cemented itself as the dominant force in US Bitcoin ETF trading. The fund, which now manages roughly $70 billion in assets, has become the principal gateway for crypto-linked options activity. At its peak in October, open interest in IBIT options topped $50 billion, placing it on par with Deribit, the world’s largest dedicated crypto options platform.

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Data shows that contracts associated with IBIT account for 98% of all options trading tied to Bitcoin ETFs and roughly 96% of total open interest across the category underscoring just how central the product has become to institutional investors.

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That institutional shift is playing a crucial role in shaping market direction. Large asset managers and professional traders are increasingly relying on regulated, exchange-listed tools such as IBIT to fine-tune their Bitcoin exposure while avoiding the complexities of offshore or unregulated venues.

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JPMorgan Chase & Co. offered a clear example of that migration this week, filing plans to launch structured notes tied to IBIT. According to Sun, more issuers are likely to follow JPMorgan’s lead as investor appetite for compliant, transparent Bitcoin-linked instruments continues to grow. “It’s reasonable to expect that additional structured products will adopt IBIT as their underlying asset,” he said, calling it a natural step as institutional involvement in the digital-asset space deepens.

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The proposal to expand IBIT’s options limits also reinforces how quickly crypto-related markets are integrating with traditional financial infrastructure. As Bitcoin becomes increasingly woven into regulated investment products, exchanges like Nasdaq are adjusting capacity, oversight, and position rules to keep pace with institutional use cases.

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If the SEC approves the latest request, options traders would gain significantly more flexibility in sizing positions, constructing hedges, and building advanced strategies around Bitcoin’s volatility potentially encouraging even greater liquidity and depth in the market. For fund managers looking to navigate crypto exposure with precision, the change could mark an important milestone.

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The filing’s timing also reflects how rapidly the regulatory environment around digital-asset products is evolving. What began as a niche corner of the market has transformed into a substantial segment drawing billions in flows, widespread institutional participation, and ongoing development of new investment structures.

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As Nasdaq pushes to raise its contract ceiling once again, the message is clear: Bitcoin-linked ETFs like IBIT are no longer fringe instruments. They’re becoming core components of the broader options ecosystem and exchanges are gearing up to support the next wave of demand.

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