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Game-Changer For Bitcoin: Nasdaq Targets 1M Option Limit For BlackRock’s IBIT

Nasdaq’s choices venue is transferring to place BlackRock’s iShares Bitcoin Trust (IBIT) in the identical danger tier as the most important, most liquid ETFs in conventional markets, with a brand new proposal to multiply the ceiling on IBIT choices positions to 1 million contracts.

According to a rule submitting submitted to the US Securities and Exchange Commission (SEC), Nasdaq ISE is searching for to lift place and train limits for IBIT choices from 250,000 contracts to 1,000,000 contracts. In parallel, the change needs to take away place limits totally for bodily settled FLEX IBIT choices, a bespoke, institution-focused phase of the market.

Why This Is A Major News For Bitcoin

The request comes solely months after IBIT choices limits had been raised from 25,000 to 250,000 contracts. Bloomberg ETF analyst Eric Balchunas famous on X that “they only raised the restrict to 250,000 (from 25,000) in July,” including that “IBIT is now the most important bitcoin choices market on the earth by open curiosity.”

The speed of that progression – 25,000 to 250,000 to a proposed 1,000,000 – is being learn as a sign that institutional demand for IBIT choices is already urgent towards the present cap. As one commenter put it, the exchanges “solely elevate limits when demand is genuinely straining the system,” and transferring to 1 million “means IBIT choices buying and selling has grown a lot that the present ceiling is constraining institutional methods.”

ProfessionalCap CIO Jeff Park framed the transfer as overdue, saying “IBIT choices is lastly getting the remedy it deserves,” and highlighting that Nasdaq has filed “to extend choices restrict to 1 MILLION (from 25k a yr in the past). Institutional vol is lastly right here.”

On-chain and derivatives analyst James Van Straten emphasized two factors: the scale of the proposed bounce and the remedy of FLEX contracts. “One million contracts and eradicating limits on bodily settled FLEX IBIT choices, matching main commodity ETFs like GLD,” he wrote.

In his view, the result’s that “Bitcoin liquidity [is] about to get even deeper,” to the purpose that “70% corrections can be a factor of the previous.” When challenged on whether or not that might additionally dampen upside, he replied that it “relies on the liquidity measurement that enters the market,” underscoring that flows, not simply construction, decide value dynamics.

Market commentator Adam Livingston described the submitting as “INCREDIBLY BULLISH NEWS FOR BITCOIN,” arguing that “Nasdaq simply moved IBIT (BlackRock’s Bitcoin ETF) into the identical regulatory class as the most important, most liquid equities on Earth.”

He highlighted that the change represents “40× MORE ROOM for institutional derivatives publicity” in comparison with the unique 25,000-contract cap and framed it because the second “from ‘ETF adoption part’ to derivatives market part.” In his phrases, “Bitcoin simply bought promoted to Mega-Cap Status,” with the rule submitting justifying IBIT’s remedy primarily based on its market cap, liquidity and buying and selling frequency alongside the most important ETFs.

Structurally, the proposal would deepen the on-exchange derivatives stack constructed round Bitcoin. A 1 million contract restrict broadens the area for hedging, earnings methods and structured merchandise, whereas limitless bodily settled FLEX choices give giant establishments extra room to run personalized exposures on a regulated venue as a substitute of shifting overflow into opaque OTC markets.

However, increased limits will not be inherently directional. The similar capability that permits bigger hedges and name overlays additionally permits bigger outright brief or volatility-based positions. Around key macro dates or crypto-specific occasions, greater books and extra leverage can reduce each methods for realized volatility.

For now, the change stays a proposal. The SEC should nonetheless evaluation and determine whether or not to approve, modify, or reject Nasdaq ISE’s request. Until then, IBIT choices keep capped at 250,000 contracts, and the “1 million period” of IBIT stays a forward-looking state of affairs quite than a fait accompli.

At press time, BTC traded at $91,700.

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