Nasdaq ISE proposes historic expansion in the limits of IBIT options

Source: CritpoTendencia Original Title: Nasdaq ISE proposes historic expansion on IBIT options limits Original Link: The Nasdaq ISE options exchange formalized a request with the U.S. Securities and Exchange Commission (SEC) to increase the contract limits on options for the iShares Bitcoin Trust (IBIT) from BlackRock.

Specifically, it proposes to raise the position and exercise limits from 250,000 to one million contracts per side and, in addition, to eliminate the restrictions applied to FLEX IBIT options with physical settlement.

According to Nasdaq, the growing volume and institutional demand justify this adjustment, in order to position IBIT at the level of the most liquid ETFs in the market.

An institutional wave that demands greater operational capacity

The proposed increase comes in a context where IBIT has recently surpassed crypto-native platforms like Deribit in terms of open interest, consolidating itself as the main trading center for Bitcoin options under U.S. regulation.

In this context, Nasdaq ISE maintains that the current limit of 250,000 contracts acts as a brake for market makers and institutional investors who need to trade larger volumes to hedge risk or implement yield strategies.

Therefore, it states that raising the limits would allow for expanding the capacity for coverage, improving operational flexibility, and increasing the depth of the Bitcoin derivatives market.

In addition, in the document sent to the SEC, the exchange compares the liquidity of IBIT with that of large global ETFs and notes that, even with a block of one million contracts, this volume would represent only 7.5% of the float of IBIT and 0.284% of the total supply of Bitcoin, which -according to the entity- significantly reduces the risk of systemic effects.

The new scope of IBIT options

Options are key instruments for institutional investors looking to hedge price fluctuations or generate income through premiums.

In this sense, by raising the limits for IBIT, Nasdaq ISE allows capital funds, hedge funds, and trading desks to implement more sophisticated strategies without relying solely on the spot market.

Moreover, the removal of the limit on FLEX options with physical settlement adds an additional level of versatility, as it allows for the customization of expirations and conditions, a crucial element for large-scale corporate or institutional operations.

Overall, this technical adjustment reinforces the idea that Bitcoin ETFs -with IBIT at the forefront- are leaving behind their initial phase of adoption and moving towards an accelerated process of institutionalization, supported by an increasingly similar infrastructure to that of traditional assets.

IBIT advances in the transition to regulated markets

If the SEC approves the application, IBIT will consolidate its position as the leading regulated vehicle for gaining exposure to Bitcoin, which in turn could attract even more institutional capital to the ecosystem.

Moreover, this advancement reinforces the trend of migration from unregulated platforms to supervised markets within the United States, reducing counterparty risk and providing greater traceability for funds, institutions, and portfolio managers.

Furthermore, the measure structurally promotes the development of the Bitcoin derivatives market under U.S. regulations, contributing to its legitimization as an asset comparable to stocks or bonds.

Overall, the expansion of the range of options represents a significant improvement in infrastructure, liquidity, and operational capacity to implement hedging strategies or risk-adjusted return, which could redefine the investment profile in cryptocurrencies in the coming years.