Nasdaq wants the SEC to remove 25,000 position limits on crypto ETF options

Stock exchange operator Nasdaq wants federal regulators to ease trading restrictions on options for Bitcoin and Ethereum exchange-traded funds.

The company filed a request with the Securities and Exchange Commission on Jan. 21 asking officials to drop the current cap of 25,000 positions and exercise limits on options trading for several cryptocurrency funds.

Exchange makes case for rule changes

If regulators say yes, the change would apply to BlackRock’s iShare Bitcoin Trust ETF, known by its ticker IBIT, and the company’s Ethereum ETF called ETHA. Down the road, options on funds run by Grayscale, Bitwise, Fidelity, ARK21Shares, and VanEck would also see higher limits.

Under the proposal, all these crypto ETFs would follow the same position limits that apply to other funds traded through Nasdaq’s options market. That would put them on equal footing with existing ETF options.

Nasdaq told the SEC that lifting the restrictions would create fair trading rules. The exchange said the move would stop unfair treatment of different funds and help maintain an open market. The company argued that applying the same rules across the board protects people who invest while not hurting competition. Similar updates are expected at other options exchanges.

Nasdaq also asked the SEC to skip the usual 30-day waiting period and put the new rules in place right away.

The SEC is now collecting feedback from the public. Officials are expected to make a final call by the end of February.

Institutions continue buying Bitcoin

While this plays out, BlackRock has been buying more Bitcoin, apparently taking advantage of falling prices.

Early this month, BlackRock purchased 9,619 Bitcoin valued at roughly $878 million and 46,851 Ethereum worth about $149 million. The buying happened over three days in a row. According to Lookonchain, a firm that tracks blockchain activity, the combined purchases totaled around $1.03 billion.

Other companies are also adding Bitcoin to their books. Strategy, a business intelligence software company, bought 22,305 BTC between Jan. 12 and Jan. 19. The company paid approximately $2.13 billion for that batch. After the purchase, Strategy now holds 709,715 BTC in total.

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