A significant development occurred on Friday, signaling the accelerating institutionalization of the bitcoin market, which has been driven by individual investors for years. This is due to the fact that options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, have grown larger on Nasdaq than the total bitcoin options trading on the offshore platform Deribit. Notably, IBIT options have closed the gap with Deribit's bitcoin options market in just two years, despite Deribit's head start since 2016.
On Friday, the open interest in IBIT options contracts on Nasdaq reached $27.61 billion, surpassing the $26.90 billion in Deribit's bitcoin options, according to data from Volmex. This milestone indicates that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is now on par with the offshore market.
Furthermore, a thriving, regulated market in the US could encourage more Wall Street institutions to explore digital assets, ultimately leading to more mature price discovery. Deribit's Global Head of Retail Sales and Business, Sidrah Fariq, views IBIT's rise as a positive development for the broader crypto derivatives ecosystem, stating that it provides US retail investors with direct access to regulated leverage and options exposure. Fariq notes that the current macro environment, marked by supply chain uncertainty, energy shocks, and geopolitical risks, drives demand for hedging and options strategies. Options are derivative contracts that give the purchaser the right to buy or sell the underlying asset at a predetermined price at a later date.
Analysts use open interest as a measure of 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 income on coin or ETF holdings. One popular income-generating strategy involving IBIT ETF and IBIT options is the covered call strategy, which allows investors to profit from BTC's implied volatility by holding the ETF and shorting IBIT calls at levels above the ETF's current market price.
Although the two markets now match each other in scale, they differ in shape, revealing distinct trader sentiment. According to Volmex, the bulk of open interest in IBIT call options suggests expectations of an ETF rally to levels equivalent to BTC trading at $109,709 in the near term, roughly 41% higher than the current market price. In contrast, positioning in Deribit options is bullish but more measured, indicating expectations of a rally to $106,000.
Volmex notes that onshore call open interest is concentrated further out-of-the-money than offshore, consistent with onshore flow being driven by retail upside speculation and systematic call overwriting programs. ETF holders tend to be 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, which Volmex attributes to a structural quirk where ETF holders cannot easily short bitcoin directly and instead buy put options as a hedge. Overall, IBIT's rapid rise in the options market is striking, and it now appears to rival Deribit in scale, although the two are not direct substitutes, with IBIT options catering to regulated, onshore investors and Deribit remaining the go-to platform for global investors.