A notable development occurred on Friday, marking a significant milestone in the accelerating institutionalization of the bitcoin market. This is attributed to the growth of options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, which has surpassed the total bitcoin options trading on Deribit.
In just two years, IBIT options have closed the gap with Deribit's bitcoin options market, which has been operating since 2016. On Friday, the open interest of IBIT options contracts on Nasdaq was $27.61 billion, slightly higher than Deribit's $26.90 billion. This milestone signifies 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 seen as 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 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.
The two markets, IBIT and Deribit, now match each other in scale but are positioned differently, revealing distinct trader sentiment. According to Volmex, the bulk of open interest in IBIT call options is concentrated at strike levels equivalent to bitcoin trading around $109,709. Positioning in Deribit options is also concentrated on the higher side but is slightly more conservative. The onshore call open interest is roughly 4 percentage points further out-of-the-money than offshore, consistent with onshore flow being dominated by retail upside speculation.
Put positioning is largely aligned across venues, with open interest concentrated around the $63,500 strike. ETF holders tend to be more patient, with IBIT options expiries preferred in October 2026, while August expiries dominate on Deribit. Lastly, IBIT's implied volatility is higher than Deribit's, attributed to a structural quirk where ETF holders cannot easily short bitcoin directly, leading to increased demand for put options. The rapid rise of IBIT options is striking, and while it now rivals Deribit in scale, the two are not direct substitutes, catering to different investor bases.