A notable development occurred on Friday, signaling the accelerating institutionalization of the bitcoin market. This is due to the growth of options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, which have surpassed the total bitcoin options trading on Deribit.
The dollar value of open IBIT options contracts on Nasdaq reached $27.61 billion, exceeding Deribit's bitcoin options by $0.71 billion. This milestone indicates that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is now on par with the offshore market. The rise of IBIT options is expected to embolden more Wall Street institutions to explore digital assets, leading to more mature price discovery.
According to Sidrah Fariq, Deribit's Global Head of Retail Sales and Business, IBIT's growth is a net positive for the broader crypto derivatives ecosystem, providing US retail investors with direct access to regulated leverage and options exposure. Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price.
Analysts use open interest to measure market size and participation, with higher open interest indicating a deeper and more liquid market. Traders use options to hedge existing positions, speculate on price direction, and generate additional income.
One popular strategy involving IBIT ETF and IBIT options is the covered call strategy, which allows investors to profit from BTC's implied volatility. The two markets, IBIT and Deribit, now match each other in scale but are positioned differently, revealing trader sentiment. According to Volmex, the bulk of open interest in IBIT call options points to expectations of an ETF rallying to levels equivalent to BTC trading at $109,709 in the near-term. The positioning in Deribit options is bullish but slightly measured, suggesting expectations of a rally to $106,000.
The onshore call open interest is concentrated roughly 4 percentage points further out-of-the-money than offshore, consistent with onshore flow being dominated by retail upside speculation and systematic call overwriting programs. ETF holders are more patient, with October 2026 expiries preferred in IBIT, while August expiries dominate on Deribit. Lastly, IBIT's implied volatility is higher than the implied volatility derived from Deribit's BTC options, attributed to a structural quirk where ETF holders cannot easily short bitcoin directly.
The rapid rise of IBIT options is striking, and in many ways, now appears to rival Deribit in scale. However, the two are not direct substitutes, as IBIT options primarily cater to regulated, onshore investors, while Deribit remains the go-to place for global investors.