Nasdaq ISE has requested SEC approval to elevate BlackRock’s iShares Bitcoin Trust ETF option limits from 250,000 to 1 million contracts, reflecting rising institutional interest in Bitcoin.
This move could enhance liquidity for IBIT, making it a significant player in Bitcoin-linked options and attracting substantial institutional investments.
Nasdaq ISE seeks SEC approval to raise BlackRock IBIT ETF option limits to 1 million contracts, enhancing market capacity.
Nasdaq ISE Seeks SEC Approval for Option Limit Raise
Nasdaq ISE has submitted a request to the SEC to raise option limits for BlackRock’s iShares Bitcoin Trust ETF. The proposed limit increases from 250,000 to 1 million contracts aim to accommodate rising institutional demand for Bitcoin-linked products.
Nasdaq ISE, the proposer of this rule change, argues that current limits hinder market participants’ hedging capabilities. If approved, BlackRock’s IBIT ETF would join the top-tier ETFs like EEM and FXI, positioning it for increased institutional involvement.
“The Exchange expects continued options volume growth in IBIT as opportunities for investors to participate in the options markets increase and evolve.” – Nasdaq ISE
1 Million Contract Limit to Boost Bitcoin Liquidity
The proposed changes could significantly enhance market liquidity for Bitcoin through the IBIT ETF. Nasdaq ISE expects options volume growth, driven by institutional investors’ needs for more extensive hedging strategies, as current limits appear inadequate for high-demand scenarios.
By increasing the contract limits, larger institutions could perform hedging operations with capacities exceeding $1 billion. Historical trends show that such expansions can lead to greater institutional flow, deeper markets, and widespread acceptance of the underlying asset.
Institutional Demand Aligns with ETF Limit Increases
Previous ETF options limit increases for funds like EEM resulted in substantial institutional participation and deeper market liquidity. Such changes historically bolster the mainstream acceptance of an asset, as seen when pushed to higher trading volumes and involvement.
Experts from Kanalcoin suggest that the proposed increase aligns with the observable growth in Bitcoin’s institutionalization. Reflecting on historical trends, the enhanced limits may facilitate greater price discovery and yield-generative strategies for institutional investors.
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