Bitcoin News Today: SEC Boosts Bitcoin ETF Limits BlackRock Gains Edge Over Fidelity

BlackRock’s Bitcoin ETF is set to strengthen its dominant position in the U.S. market following a key regulatory update from the Securities and Exchange Commission (SEC). On Tuesday, the SEC raised position limits for options contracts on Bitcoin ETFs from 25,000 to 250,000 for all ETFs with options, according to a report by NYDIG. This change affects the iShares Bitcoin Trust ETF (IBIT) but not the Fidelity Wise Origin Bitcoin Fund (FBTC), which NYDIG’s global head of research, Greg Cipolaro, noted could widen the gap in market leadership between the two funds [1].

IBIT currently holds $85.5 billion in assets under management, significantly outpacing FBTC’s $21.35 billion, making it the largest Bitcoin ETF by assets [1]. Cipolaro stated that the new rule would likely suppress Bitcoin’s volatility, making the asset more attractive to institutional investors seeking balanced risk exposure. He also highlighted that the ability to execute more aggressive options strategies—such as covered call selling—could enhance demand for spot Bitcoin trading, further stabilizing market dynamics.

In addition to the position limit increase, the SEC also approved in-kind creation and redemption for Bitcoin ETFs, a long-sought feature among asset managers. This allows investors to exchange shares for the underlying Bitcoin rather than receiving cash, a development Cipolaro described as a “key feature” that will have “important impacts on market structure and investor access” [1]. The move is expected to lower operational costs, improve liquidity, and provide greater transparency for ETF providers.

The regulatory shift also has implications for Authorized Participants (APs), the financial institutions responsible for managing ETF share creation and redemption. Currently, only two APs—Jane Street and Virtu—have the necessary crypto capabilities to facilitate both sides of the trade. Cipolaro predicted that other broker-dealers without these capabilities will likely seek partnerships or acquisitions to remain competitive in the growing crypto ETF space [1].

BlackRock’s Bitcoin ETF, launched in January 2024, has already demonstrated explosive growth, becoming one of the fastest-growing ETFs in history [2]. The firm’s dominance is expected to accelerate as the new SEC rules reduce logistical barriers and increase market accessibility. Recent inflows into the fund, including a reported $29.83 million net inflow, underscore growing institutional confidence in Bitcoin as a strategic asset [4].

The broader market context shows increasing bullish sentiment among traders, with many positioning for a potential breakout above $120,000—a threshold that could bring Bitcoin closer to its all-time high of approximately $123,000 [3]. At the same time, Bitcoin’s market dominance has dipped to around 60–61%, indicating a gradual shift in capital toward alternative cryptocurrencies [4].

While the SEC’s decision does not directly approve new ETFs, it clears a regulatory pathway for existing products and sets the stage for future offerings. The approval of in-kind mechanisms is expected to encourage more institutional participation and could lead to greater competition among ETF providers, potentially driving down fees and increasing liquidity for investors.

The regulatory environment for Bitcoin and related investment vehicles continues to evolve, with U.S. regulators adopting a more structured approach to digital assets. Similar developments are emerging in Asia and the Middle East, where interest in Bitcoin-based products is also on the rise [5].

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Source:

[1] https://cointelegraph.com/news/blackrock-bitcoin-etf-monstrous-lead-sec-options-change-nydig

[2] https://www.tradingview.com/symbols/OKX-BTCUSD1%21/ideas//page-10/?contract=BTCUSD08Q2025

[3] https://medium.datadriveninvestor.com/this-week-in-crypto-options-bullish-bets-big-breakouts-and-whats-next-july-22-28-recap-f6908c8d9a96

[4] https://cfgi.io/ethereum-fear-greed-index/

[5] https://www.spreaker.com/podcast/crypto-success-bitcoin-trading-investment-strategies--6440515