Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend FLEX, Position and Exercise Limit Rules for the Grayscale Bitcoin Mini Trust ETF, the Bitwise Bitcoin ETF, and the Grayscale Bitcoin Trust ETF

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103643; File No. SR-ISE-2025-22]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend FLEX, Position and Exercise Limit Rules for the Grayscale Bitcoin Mini Trust ETF, the Bitwise Bitcoin ETF, and the Grayscale Bitcoin Trust ETF</SUBJECT> <DATE>August 5, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on July 31, 2025, Nasdaq ISE, LLC (“ISE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange proposes to amend Options 3A, Section 3, FLEX Option Listings; Options 3A, Section 18, Position Limits; Options 9, Section 13, Position Limits; and Options 9, Section 15, Exercise Limits, with respect to options on the Grayscale Bitcoin Mini Trust ETF (“BTC”), the Bitwise Bitcoin ETF (“BITB”) and the Grayscale Bitcoin Trust ETF (“GBTC”). The text of the proposed rule change is available on the Exchange's website at <E T="03">https://listingcenter.nasdaq.com/rulebook/ise/rulefilings</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to amend Options 3A, Section 3, FLEX Option Listings; Options 3A, Section 18, Position Limits; Options 9, Section 13, Position Limits; and Options 9, Section 15, Exercise Limits with respect to options on the Grayscale Bitcoin Mini Trust ETF (“BTC”), the Bitwise Bitcoin ETF (“BITB”) and the Grayscale Bitcoin Trust ETF (“GBTC”). Each change will be described below. <HD SOURCE="HD3">Position Limits</HD> Recently, NYSE Arca, Inc. (“Arca”) received approval to eliminate the current 25,000 contract position and exercise limit for options on BTC and BITB. <SU>3</SU> <FTREF/> As a result, Arca would apply the position limits as determined by Arca Rule 6.8-O, Commentary .06(a)-(e) to options on BTC and BITB. Additionally, Arca recently received approval to eliminate the current 25,000 contract position and exercise limit for options on GBTC. <SU>4</SU> <FTREF/> As a result, Arca would apply the position limits as determined by Arca Rule 6.8-O, Commentary .06(a)-(e) to options on GBTC. <FTNT> <SU>3</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103568 (July 29, 2025) (SR-NYSEArca-2025-10) (not yet noticed). </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103567 (July 29, 2025) (SR-NYSEArca-2025-07) (not yet noticed). </FTNT> The Exchange proposes to similarly amend its position limit rules at ISE Options 9, Section 13 and exercise limit rules at ISE Options 9, Section 15 to likewise eliminate the current 25,000 contract position and exercise limit for options on BTC, BITB and GTBC. As a result, BTC, BITB and GTBC would be subject to the position limits described in ISE Options 9, Section 13 which provides that the position limits for equity options are 25,000 or 50,000 or 75,000 or 200,000 or 250,000 option contracts (with adjustments for splits, re-capitalizations, etc.) on the same side of the market or such other number of option contracts as may be fixed from time to time by the Exchange. Further, ISE Options 9, Section 13(d) describes how the Exchange determines which of the five position limit amounts will apply to an equity option class ( <E T="03">i.e.,</E> the position limit applicable to a class is determined based on the trading volume and outstanding shares of the underlying security). <HD SOURCE="HD3">BTC and BITB</HD> On October 18, 2024, the Commission approved the listing and trading of BTC and BITB on Arca. <SU>5</SU> <FTREF/> On November 22, 2024, Arca obtained rule authority to trade options on BTC and BITB. <SU>6</SU> <FTREF/> The current position and exercise limits for BTC and BITB options are 25,000 contracts on ISE, the lowest limit available in options. <SU>7</SU> <FTREF/> Arca proposed to effectively increase the aggregated position and exercise limits for each ETF to 250,000 contracts. Arca noted that BTC and BITB currently qualify for this increased limit pursuant to Arca Rule 6.8-O Commentary .06(e), which requires that, for the most recent six-month period, trading volume for the underlying security is at least 100,000,000 shares. <SU>8</SU> <FTREF/> Arca noted that, as of November 25, 2024, during the most recent six-month period, trading volume for BTC was 163,712,700 shares. Arca noted that during the same period, trading volume for BITB was 288,800,860 shares. In addition, Arca noted that, as of November 25, 2024, the market capitalization for BTC was $3,496,748,882  <SU>9</SU> <FTREF/> with an average daily volume (“ADV”) for the preceding three months of 2,036,369 shares, and the market capitalization of BITB was 4,095,157,000  <SU>10</SU> <FTREF/> with an ADV for the three prior months of 2,480.478. BTC and BITB are well above the requisite minimum of 100,000,000 shares necessary to qualify for the 250,000 contract position and exercise limit. Also, Arca noted that, as of November 25, 2024, there were 19,787,762 bitcoins in circulation. <SU>11</SU> <FTREF/> At a price of $94,830 per bitcoin, <SU>12</SU> <FTREF/> that equates to a market capitalization of greater than $1.876 trillion. Arca noted that if a position limit of 250,000 contracts were considered for each ETF, the exercisable risk would represent 30.14%  <SU>13</SU> <FTREF/> of BTC shares outstanding; and 31.27%  <SU>14</SU> <FTREF/> of BITB shares outstanding. Given the liquidity of BTC and BITB, the current 25,000 position limit appears extremely conservative. <FTNT> <SU>5</SU>   <E T="03">See</E> Securities Exchange Act Release No. 101386 (October 18, 2024), 89 FR 84960 (October 24, 2024) (SR-NYSEAMER-2024-49) (order approving rules to permit the listing and trading of options on BTC and BITB, among others) (the “ETF Options Approval Order”). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> Securities Exchange Act Release No. 101713 (November 22, 2024), 89 FR 94839 (November 29, 2024) (SR-NYSEARCA-2024-101) (notice of immediately effective rule change to permit BTC and BITB options trading, based on the already-approved NYSE American rules) (the “Arca ETF Options Notice”). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> ISE Options 9, Section 13. </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> Arca Rule 6.8-O Commentary .06(e) (providing at subparagraph (e) that the position limit shall be 250,000 contracts for options: (i) on underlying stock or Exchange-Traded Fund Share that had trading volume of at least 100,000,000 shares during the most recent six-month trading period; or (ii) on an underlying stock or Exchange-Traded Fund Share that had trading volume of at least 75,000,000 shares during the most recent six-month trading period and has at least 300,000,000 shares currently outstanding). </FTNT> <FTNT> <SU>9</SU>  The market capitalization of BTC was determined by multiplying a settlement price ($42.16) by the number of shares outstanding (82,939,964). Data represents figures from FactSet as of November 25, 2024. </FTNT> <FTNT> <SU>10</SU>  The market capitalization of BITB was determined by multiplying a settlement price ($51.70) by the number of shares outstanding (79,950,100). Data represents figures from FactSet as of November 25, 2024. </FTNT> <FTNT> <SU>11</SU>   <E T="03">See https://www.coingecko.com/en/coins/bitcoin.</E> </FTNT> <FTNT> <SU>12</SU>  This is the approximate price of bitcoin from 4:00 p.m. ET on November 25, 2024. </FTNT> <FTNT> <SU>13</SU>  This percentage is arrived at with this equation: (250,000 contract limit * 100 shares per option/82,939,964 BTC shares outstanding). </FTNT> <FTNT> <SU>14</SU>  This percentage is arrived at with this equation: (250,000 contract limit * 100 shares per option/79,950,100 BITB shares outstanding). </FTNT> First, Arca reviewed the ETFs' data relative to the market capitalization of the entire bitcoin market in terms of exercise risk and availability of deliverables. Arca noted that, as noted above, as of November 25, 2024, there were 19,787,762 bitcoins in circulation. <SU>15</SU> <FTREF/> At a price of $94,830 per bitcoin, <SU>16</SU> <FTREF/> that equates to a market capitalization of greater than $1.876 trillion. Arca noted that if the proposed aggregated position limit of 250,000 contracts were considered, the exercisable risk would represent 30.14% of BTC shares outstanding  <SU>17</SU> <FTREF/> and 31.27% of BITB shares outstanding. <SU>18</SU> <FTREF/> Arca noted that since ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 59k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━