Nasdaq plans to quadruple the trading limit for BlackRock's Bitcoin ETF Options.

According to Bloomberg, the Nasdaq International Securities Exchange plans to increase the daily trading limit for options linked to the BlackRock iShares Bitcoin Trust ETF (IBIT) from 250,000 to 1 million. The U.S. Securities and Exchange Commission (SEC) disclosed the relevant application documents on Wednesday.

Documents show that the proposed position limits and transaction limits will be consistent with the options position limits of the iShares MSCI Emerging Markets ETF, iShares China Large-Cap ETF, and iShares MSCI EAFE ETF. Tim Sun, a senior researcher at Hashkey Group, pointed out that this move not only reflects the growth in trading volume but also demonstrates a strong demand in the market for hedging, risk management, and complex strategies.

This is the second time Nasdaq has applied to raise the IBIT Options limit. After the listing of IBIT Options in January of this year, trading activity surged rapidly, prompting Nasdaq to increase the limit tenfold to 250,000 contracts, which received SEC approval in July. IBIT is currently the largest Bitcoin ETF with assets of approximately $70 billion, and its options open interest once exceeded $50 billion in October, comparable to major crypto options exchanges like Deribit. Bloomberg data shows that options linked to IBIT account for 98% of Bitcoin ETF options trading, representing 96% of total open interest.

Institutional investors have driven this trend. Large investors are increasingly relying on regulated ETF products to manage their Bitcoin exposure. Sun pointed out that JPMorgan applied this week to issue structured notes linked to IBIT, and more institutions may follow suit in the future, adopting IBIT as an underlying asset, marking an acceleration in institutional participation in Bitcoin investments.

If this proposal is approved, it will further enhance the liquidity of IBIT Options, providing institutional investors with more trading and risk management tools, while demonstrating the market's growing demand for Bitcoin ETF derivatives.