Nasdaq has requested approval to quadruple the daily trading limit for options tied to BlackRock Inc.'s iShares Bitcoin Trust ETF as institutional demand continues to rise. The proposal would increase the contract ceiling from 250,000 to 1 million for the fund trading under the IBIT ticker.
What Happened: Exchange Proposes Limit Increase
The Securities and Exchange Commission disclosed Wednesday that Nasdaq's International Securities Exchange filed to expand the position and exercise limits for IBIT options.
The request aligns the Bitcoin ETF's trading caps with limits currently applied to options on iShares MSCI Emerging Markets, iShares China Large-Cap ETF and iShares MSCI EAFE ETF, according to the filing. This represents the second expansion request for IBIT options since contracts launched.
In January, shortly after options received approval, Nasdaq increased the daily limit tenfold to 250,000 contracts as trading activity accelerated. The SEC approved that adjustment in July.
IBIT has emerged as the dominant player in Bitcoin ETF markets, holding approximately $70 billion in assets.
Open interest in IBIT options reached more than $50 billion at its peak in October, approaching levels seen on Deribit, the largest crypto options exchange. Contracts tied to IBIT represent 98% of all Bitcoin ETF options trading and 96% of total open interest, according to data compiled by Bloomberg.
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Why It Matters: Institutional Adoption Accelerates
The proposed increase reflects fundamental changes in how institutional investors access cryptocurrency markets, according to Tim Sun, a senior researcher at Hashkey Group. The expansion "points to substantial needs for hedging, risk management, and more sophisticated strategy construction," he said.
Large financial institutions are shifting toward regulated products for Bitcoin exposure.
JPMorgan Chase & Co. filed this week to launch structured notes linked to IBIT, and additional issuers may pursue similar offerings, Sun noted. "It is reasonable to expect more structured products to adopt IBIT as their underlying asset, which is a natural outcome of deeper institutional participation in Bitcoin," he said.
The growing reliance on exchange-traded products marks a departure from direct cryptocurrency holdings and unregulated derivatives. Regulated options provide institutional investors with tools for portfolio hedging and strategic positioning while operating within established compliance frameworks.
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