Nasdaq ISE has filed a proposal to significantly raise the options position limits for BlackRock's spot Bitcoin ETF, IBIT.
The proposed increase would set the limit at 1,000,000 contracts. This move is expected to not only facilitate greater institutional participation but also signal an expansion that could fundamentally alter market dynamics.
To understand the scale of this decision, consider that standard ETFs typically have a 25,000 contract limit. Even the prior increase in the IBIT limit from 25,000 to 250,000 in July was considered a substantial development. Bloomberg analyst Eric Balchunas commented on the significance of the new proposal, stating, “A new proposal has been submitted to increase the limit on IBIT options to 1 million contracts. The limit was raised from 25,000 to 250,000 in July. IBIT is now the world's largest Bitcoin options market in terms of open interest.”
Market Implications and Analyst Reactions
Cryptocurrency market analyst Adam Livingston described the development as “extraordinarily bullish,” suggesting it marks a structural turning point for Bitcoin. According to Livingston, Nasdaq has now categorized IBIT alongside the world's largest and most liquid stocks in terms of liquidity and trading frequency. This elite category currently includes major holdings such as Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), SPY, and QQQ.
This new regulation effectively opens up 40 times more institutional derivatives trading space for the Bitcoin ETF. Livingston posits that this expansion represents a "transition from the ETF adoption phase to a new era of scaling derivatives." Analysts further note that Bitcoin's price discovery has historically experienced its steepest surges during periods of growth in derivatives markets, leading them to conclude that IBIT has now achieved “mega-cap status.”