Nasdaq Seeks 300% Boost for BlackRock’s IBIT Bitcoin ETF Options as Dominance Hits 98%
Introduction
The landscape for Bitcoin-based derivatives is undergoing a seismic shift as traditional finance giants push deeper into the crypto space. Nasdaq’s International Securities Exchange (ISE) has formally requested regulatory approval to raise the position limit for BlackRock’s iShares Bitcoin Trust ETF (IBIT) options from 250,000 to 1 million contracts. This move, the second such cap increase request in under a year, highlights explosive institutional demand for regulated Bitcoin exposure. While crypto-native platform Deribit continues to dominate global Bitcoin options open interest—reaching a record $50.27 billion—the U.S.-listed IBIT ETF options now command a staggering 98% of the Bitcoin ETF options market. With the SEC reviewing Nasdaq’s latest filing, the outcome could significantly shape institutional trading strategies and liquidity in the months ahead.
The Mechanics Behind Nasdaq’s Position Limit Increase Request
Position limits are regulatory controls that cap the number of derivative contracts any single entity can hold, designed to prevent market manipulation and excessive speculation. Nasdaq ISE’s current filing before the SEC seeks to raise the limit on IBIT options from 250,000 contracts to 1 million—a 300% increase. According to the exchange, this adjustment is necessary to “address growing institutional demand for IBIT options and to facilitate legitimate trading strategies.”
This is not the first time Nasdaq has pursued such an expansion. Earlier in the year, the ISE successfully increased the trading cap by a factor of 10, reflecting how quickly adoption has outpaced initial regulatory frameworks. The latest request signals that even those earlier adjustments are now insufficient for the volume of institutional activity flowing into IBIT options. By enabling larger positions, Nasdaq aims to improve market depth, tighten bid-ask spreads, and attract more sophisticated participants such as hedge funds and market makers.
IBIT’s Meteoric Rise in the Bitcoin ETF Options Space
Since its launch, BlackRock’s iShares Bitcoin Trust (IBIT) has emerged as a cornerstone of the spot Bitcoin ETF arena. Its options market has followed suit, with Bloomberg News reporting that IBIT options now represent approximately 98% of all Bitcoin ETF options trading. At its peak in October, IBIT’s options open interest reached approximately $50 billion—a figure that underscores its gravitational pull within the regulated derivatives landscape.
Several factors explain IBIT’s dominance. BlackRock’s established reputation, combined with deep liquidity in the underlying ETF shares, makes IBIT options a preferred vehicle for institutions seeking Bitcoin exposure without direct custody of cryptocurrencies. Additionally, the product’s listing on a regulated U.S. exchange provides legal and operational clarity that many traditional investors require. As one of several spot Bitcoin ETFs approved in early 2024, IBIT has consistently led its peers in assets under management and daily volume, creating a natural ecosystem for its options to thrive.
Deribit: The Unshaken Leader in Global Crypto Options
While IBIT dominates the U.S.-listed Bitcoin ETF options niche, Deribit remains the global leader for crypto-native options trading. As of late 2025, Deribit reported a record Bitcoin options open interest of roughly $50.27 billion, supported by 453,820 active BTC contracts. In 2024 alone, Deribit saw its total trading volume surge by 95% to over $1.185 trillion, with options accounting for about $743 billion of that activity.
Deribit’ continued dominance stems from several structural advantages: a wide range of expiry dates, deep liquidity across both call and put options, and a user base composed largely of professional traders and institutions comfortable operating outside U.S. regulatory boundaries. Unlike U.S.-listed options, which are constrained by trading hours and position limits, Deribit offers 24/7 trading and fewer restrictions on contract size—features critical during periods of high volatility.
A Tale of Two Markets: Regulated vs. Crypto-Native Options
The simultaneous growth of IBIT options and Deribit underscores a broader divergence between regulated securities markets and crypto-native platforms. IBIT options appeal primarily to U.S.-regulated entities—asset managers, pension funds, and broker-dealers—that prioritize compliance, familiarity with equity-style options mechanics, and integration with existing trading infrastructure.
By contrast, Deribit serves an international clientele that values flexibility, around-the-clock access, and the ability to trade purely crypto-settled contracts. Despite IBIT’s 98% share of the Bitcoin ETF options submarket, Deribit still controls the lion’s share of global Bitcoin options open interest overall. This indicates that while U.S. regulated products are gaining traction rapidly, much of the global liquidity remains on established crypto exchanges.
Regulatory Hurdles and the SEC’s Deliberation
The SEC’s approval is required before Nasdaq can implement the proposed position limit increase for IBIT options. The Commission has historically approached Bitcoin-related products with caution, scrutinizing issues such as market manipulation, investor protection, and correlation with underlying spot markets.
In its filing, Nasdaq ISE argued that higher limits are warranted given the “growing institutional demand” and the need to support “legitimate hedging and trading strategies.” The SEC’s decision will hinge on whether it views the current 250,000 contract limit as inhibiting legitimate market activity or if it perceives elevated limits as increasing systemic risk. A rejection or significant delay could temporarily stifle liquidity growth in U.S.-listed Bitcoin options, potentially diverting volume back toward offshore venues like Deribit.
Historical Context: From Niche Product to Mainstream Asset
Bitcoin derivatives have evolved dramatically since CME Group launched the first regulated Bitcoin futures in 2017. Initially met with skepticism, these products gradually gained acceptance as custodial solutions improved and institutional interest grew. The introduction of spot Bitcoin ETFs in January 2024 marked another milestone, creating a bridge between traditional equity markets and digital assets.
The subsequent approval of options on these ETFs—beginning in mid-2024—enabled investors to employ complex strategies such as covered calls, protective puts, and volatility spreads using familiar brokerage accounts. Each regulatory green light has correlated with increased open interest and notional volumes, illustrating a clear trend toward financialization and integration of Bitcoin into legacy systems.
Conclusion: What Lies Ahead for Bitcoin Derivatives Markets
The Nasdaq ISE’s request to raise IBIT options limits is more than a procedural update—it is a barometer of institutional adoption. Should the SEC approve the increase, expect accelerated liquidity formation around U.S.-listed Bitcoin derivatives, potentially narrowing the gap between regulated and crypto-native platforms over time.
Market participants should monitor several key developments:
- The SEC’s ruling on Nasdaq’s position limit request
- Monthly open interest trends for both IBIT options and Deribit BTC contracts
- Potential launches of options on other spot Bitcoin ETFs
While Deribit remains the global leader for now, the sheer growth velocity of U.S. regulated products suggests convergence between traditional and crypto markets is well underway. For investors and traders, this evolution means more tools, more liquidity, and increasingly sophisticated avenues for gaining Bitcoin exposure.