Bitcoin News Today: Bitcoin Derivatives Seek to Shed Training Wheels as Nasdaq Pushes 1M Expansion

Nasdaq is pushing for a significant expansion of trading limits for options linked to BlackRock's iShares Bitcoin Trust (IBIT), a move that could mark a pivotal moment in the institutional adoption of Bitcoin derivatives. The exchange's International Securities Exchange (ISE) has formally requested the U.S. Securities and Exchange Commission (SEC) to raise position and exercise limits for IBIT options from 250,000 to 1,000,000 contracts according to Nasdaq's filing. This proposal, filed on November 21, 2025, aligns IBIT with major equities and ETFs like Apple and the SPDR S&P 500 ETF, reflecting its rapid ascent as a cornerstone of the crypto derivatives market as reported by financial sources.

The current 250,000-contract cap, in place since January 2025, has been criticized as restrictive by market participants. Jeff Park of Bitwise Asset Management noted that the previous limit was "too low" to accommodate growing institutional demand, while Bloomberg's Eric Balchunas highlighted that IBIT has already overtook global platforms like Deribit as the largest Bitcoin options market by open interest. Nasdaq's analysis underscores that even a fully exercised 1 million-contract position would represent just 0.284% of the total Bitcoin supply, minimizing systemic risk while enabling larger strategies according to Nasdaq's analysis.

The proposal also seeks to remove position limits for physically settled FLEX options, a type of customizable contract used by large funds for hedging and structured products as reported by Nasdaq. This change would align IBIT with commodity-based ETFs like the SPDR Gold Trust (GLD), which already operate without such constraints. Tim Sun of HashKey Group emphasized that the move reflects institutional demand for Bitcoin exposure through regulated, on-exchange instruments, shifting focus from speculative trading to long-term allocation strategies according to HashKey Group analysis.

BlackRock's IBIT has seen explosive growth since its launch in early 2024, amassing $86.2 billion in assets under management and averaging 44.6 million shares in daily trading volume as of September 2025. The ETF's liquidity and market depth now rival those of established ETFs, with Nasdaq arguing that the higher limit is necessary to prevent bottlenecks in hedging and yield-generation strategies as noted in Nasdaq filings. Vincent Liu of Kronos Research predicted that approval would lead to tighter bid-ask spreads and deeper order books, enhancing market efficiency for both institutional and retail participants according to Kronos Research analysis.

The SEC has opened a public comment period for the proposal, which is expected to conclude on December 17, 2025 according to SEC filings. If approved, the change could catalyze further institutional participation, with analysts forecasting a 25-30% increase in options liquidity according to market analysts. Adam Livingston, a Bitcoin analyst, described the move as a sign that crypto is "breaking out of its training wheels," positioning Bitcoin alongside blue-chip stocks like Apple in terms of market infrastructure according to Bitcoin analyst commentary.

Nasdaq's filing also highlights IBIT's role in reducing reliance on opaque over-the-counter markets, a concern for regulators and investors alike according to Nasdaq's analysis. The exchange's analysis suggests that the expanded limits would not disrupt Bitcoin's price stability, given the ETF's issuer-managed creation and redemption process. This aligns with broader trends of Bitcoin maturing as an asset class, with institutions increasingly treating it as a hedge against inflation and macroeconomic volatility according to market experts.

The outcome of the SEC's review could set a precedent for other crypto ETFs, accelerating Bitcoin's integration into mainstream finance. As BlackRock continues to expand its Bitcoin holdings across its funds-now totaling over $71 billion in Q3 2025-this regulatory shift may further legitimize crypto as a core component of institutional portfolios according to industry analysis.