Bitwise stated that rumors that Nasdaq removed the option position limit on IBIT to allow Wall Street unlimited leverage were false; the recent change only brought some cryptocurrency ETFs to benchmark levels, not completely removed the restrictions.
Jeff Park (Bitwise advisor) said that removing previous non-standard restrictions on Cryptoasset is different from deregulation. The move is primarily aimed at repairing the “damage” from previous non-standard restrictions imposed by governments and balancing competition among ETF issuers.
- The news that Nasdaq removed the IBIT option limit to allow unlimited leverage is incorrect.
- Some Bitcoin and Ethereum ETFs have had their options limits raised from 25,000 to 250,000 options.
- The application to increase the IBIT limit from 250,000 to 1 million options has not yet been approved.
Will Nasdaq remove the IBIT option limit?
No. IBIT already had a limit on its options position at the benchmark of 250,000 and was not included in the recent upward correction.
Jeff Park emphasized that “removing non-standard restrictions on Cryptoasset” does not mean “completely removing restrictions.” According to him, this change only adjusts the consequences of previous non-standard restrictions imposed by governments, rather than paving the way for unlimited leverage.
He also rejected the interpretation that Wall Street would have unlimited leverage thanks to Nasdaq “removing” the IBIT limit. The key point is that benchmark limits still exist; only non-standard limits are being adjusted to bring them back to the general level of the options market.
Which ETFs have had their limits increased, and what level is IBIT requesting?
Bitcoin ETFs such as FBTC, ARKB, HODL, and Ethereum ETFs have had their options cap increased from 25,000 to a benchmark of 250,000 options to ensure fair competition.
This increase aims to bring other funds to the same 250,000 benchmark as IBIT, thereby creating a level playing field among issuers. Since IBIT is already at the benchmark, it is not listed as subject to this adjustment.
Additionally, a filing was submitted last November to increase the IBIT limit from 250,000 to 1 million options, but this has not yet been approved as of the update.
