Nasdaq submits IBIT Options expansion document, Bitcoin derivation market welcomes 40-fold upgrade.

The Nasdaq International Securities Exchange has officially submitted documents to the SEC, applying to increase the options contract position limit of BlackRock's iShares Bitcoin Trust (IBIT) from 250,000 to 1,000,000, an increase of 400%. This change will categorize IBIT options alongside “large cap derivations” such as Apple and Nvidia, providing institutional investors with more comprehensive hedging tools. Bitcoin advocate Max Keiser believes that the 40-fold expansion of the derivation market will address the scale barrier issue for market makers, creating the necessary conditions for Bitcoin to break its historical high.

Structural Impact of Bitcoin ETF Options Market Expansion

The rule change application submitted by Nasdaq marks the formal entry of the Bitcoin ETF options market into a mature development stage. The current contract limit of 250,000 has been criticized by market expert Jeff Park as “discriminatory and too small,” failing to meet the growing risk management needs of institutional investors. In contrast, raising the limit to 1,000,000 will place IBIT options on par with mainstream tech stocks and the S&P 500 ETF, which is a milestone in the traditional financial acceptance process of Bitcoin assets.

(Source: X)

From the perspective of market microstructure analysis, the increase in contract limits will directly address the scale barriers faced by market makers. Max Keiser previously predicted that when the market hits these scale obstacles, Bitcoin will experience a pullback, and this expansion has just eliminated this constraint. Market makers can now build larger hedging positions without worrying about hitting the limits, and this increased operational flexibility will translate into tighter bid-ask spreads, deeper order books, and more active market liquidity provision.

The shift in institutional participation models is also worth noting. Industry expert Tim Sun pointed out that institutional investors are seeking Bitcoin exposure through regulated trading tools such as IBIT, a trend that reflects how allocation strategies are replacing short-term speculation as the dominant force in the market. With traditional financial institutions like JPMorgan planning to launch structured notes based on IBIT performance, Bitcoin's status as a foundational asset in financial engineering is further solidified.

Key Data and Comparison of IBIT Options Market

Current Market Position

• IBIT Options未平仓合约：全球最大Bitcoin期权市场
• Daily trading volume: 44.6 million shares (as of September 22, 2025)
• Market capitalization: 86.2 billion USD

Limit Adjustment Comparison

• Current limit: 250,000 contracts
• Application limit: 1 million contracts (increased by 400%)
• Assets of comparable scale: Apple, Nvidia, SPDR S&P 500 ETF

Potential Market Impact

• Supported position size: approximately $5.3 billion (accounting for 8% of BlackRock's total Bitcoin holdings)
• Volatility impact: Achieving volatility in the next 6-18 months may decrease by 50-100 basis points.

Derivation Upgrade and Bitcoin Price Mechanism Evolution

The improvement of the options market infrastructure has a profound impact on the price discovery mechanism of Bitcoin. Market expert Adam Livingston referred to this expansion as “the most important news of the week” and pointed out that when ETFs enter the large cap derivatives category, it will unlock second-order effects that retail investors have never seen before. These effects include market makers being able to hedge scale risks without constraints, and banks being able to run structured products without breaching risk limits, thus making Bitcoin a qualified collateral for a new level of financial engineering.

From the perspective of capital flow, the increase in options quotas provides more capital with an entry channel. Jeff Park of Bitwise Invest Advisors emphasizes that as the limits on IBIT options contracts expand, sellers in the trading volume will be able to enter the market, which will suppress short-term market noise while amplifying long-term directional capital flows. This mechanism essentially provides more stable support for Bitcoin prices, as institutional investors can express long-term views through the options market without having to frequently adjust spot positions.

Volatility management has become another key area of benefit. Derek Lim from Caladan analyzes that a more developed options market may reduce the realized volatility of Bitcoin by 50 to 100 basis points in the next 6 to 18 months. This volatility compression would not only reduce risk premiums but could also attract more risk-averse institutional investors to participate. Historical data shows that during the rise of Bitcoin from $70,000 to $110,000, there was a significant decline in volatility, and the maturity of the options market is expected to accelerate this trend.

IBIT Options Market Data and Institutional Participation

The speed of development of the IBIT options market is remarkable. Bloomberg analyst Eric Balchunas confirmed that IBIT has now become the world's largest Bitcoin options market by open interest. This achievement was realized in less than a year after the launch of the IBIT spot ETF, reflecting an explosive growth in institutional demand for Bitcoin derivation. Data as of September 22, 2025, shows that IBIT's average daily trading volume reached 44.6 million shares, with a market capitalization of up to 86.2 billion dollars, providing ample reason for its entry into higher-tier derivation categories.

BlackRock's continuous increase in its internal fund holdings of IBIT further strengthens market confidence. The latest disclosed documents show that its Strategic Income Opportunities portfolio increased its IBIT holdings by 14% in the third quarter, currently holding IBIT worth $155.8 million. Overall, funds managed by BlackRock currently hold over $71 billion in Bitcoin assets, and the new options quota will support approximately $5.3 billion in IBIT-related positions, which aligns with conventional standards for institutional risk exposure.

From a product innovation perspective, the expansion of the options market paves the way for the development of structured products. Lai Yuen, an investment analyst at Fisher8 Capital, points out that this change will promote a broader development of IBIT products, having a positive impact on long-term capital inflows. In particular, for conservative institutions that require precise risk management tools to participate in the market, a well-developed options ecosystem means they can now design more complex Bitcoin investment strategies, rather than being limited to simple spot purchases.

Regulatory Process and Market Expectation Management

The SEC received a formal proposal from Nasdaq on November 21, 2025, which is currently under public comment period, with a deadline of December 17. Based on historical experience, such technical rule changes typically receive regulatory approval, especially when they aim to meet market development needs and do not involve disputes over the nature of the underlying assets. The SEC's focus may be on whether the risk control measures and investor protection mechanisms are sufficient, rather than whether the Bitcoin derivatives market itself should be developed.

Market expectations for the approval results are generally optimistic. The clear timeline provides participants with a clear planning framework, and the 18-day review period is sufficient for industry experts to express support or concerns. Notably, the proposal also includes provisions for physical delivery FLEX options to be exempt from contract restrictions, which further enhances the feasibility of complex institutional strategies. If all goes well, the new rules are expected to officially take effect in early 2026, opening the door for a new round of institutional capital allocation.

From a broader regulatory perspective, the recent expansion of the options market is in line with the gradual acceptance strategy of U.S. financial regulators towards digital assets. After the approval of the spot Bitcoin ETF, the regulatory logic naturally extends to the development of the derivation market. This orderly regulatory evolution provides a predictable policy environment for the market, reduces the risk premium brought by regulatory uncertainty, and ultimately benefits all market participants.

Key Milestones in the Financialization Process of Bitcoin

The Nasdaq's application to increase the IBIT options quota is far more than a technical rule adjustment; it signifies an important turning point for Bitcoin as an asset class to officially enter the financial mainstream. When thousands of institutional investors can express their price views on Bitcoin and manage risks through a regulated options market, this digital asset completes a key transformation from a fringe speculative tool to a mature financial infrastructure. For Bitcoin itself, the improvement of the derivatives market will not only not weaken its value storage function but will also enhance its practicality as a value carrier by providing more refined risk management tools. As the options market and the spot market form a virtuous interaction, the price discovery mechanism for Bitcoin will become more efficient and stable, which may be the inevitable evolutionary path of Satoshi Nakamoto's envisioned “peer-to-peer electronic cash system” in the institutional era.