A notable development occurred on Friday, marking the acceleration of institutionalization in the bitcoin market, which has long been driven by individual investors. This is evident in the growth of options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, which have surpassed the total bitcoin options trading on Deribit, a major offshore platform. In just two years, IBIT options have closed the gap with Deribit's bitcoin options market, which has been in operation since 2016.
On Friday, the open interest in IBIT options contracts on Nasdaq reached $27.61 billion, slightly higher than the $26.90 billion in Deribit's bitcoin options, according to data from Volmex. 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 expected to embolden more Wall Street institutions to explore digital assets, leading to more mature price discovery.
Deribit's Global Head of Retail Sales and Business, Sidrah Fariq, views IBIT's growth as a positive development 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 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/ETF holdings.
The preferred 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, though similar in scale, differ in shape, 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 more conservative, with call open interest clustered around levels equivalent to roughly $106,000 in BTC terms. The average delta is slightly lower, consistent with onshore flow being dominated by retail upside speculation and systematic call overwriting programs. Put positioning is largely aligned across venues, with open interest concentrated around the $63,500 strike.
ETF holders tend to be more patient, with October 2026 expiries preferred in IBIT, while August expiries dominate on Deribit. IBIT's implied volatility is higher than the implied volatility derived from Deribit's BTC options, due to a structural quirk that makes it difficult for ETF holders to short bitcoin directly. The rapid rise of IBIT options is striking, and the two markets are not direct substitutes, as IBIT options cater to regulated, onshore investors, while Deribit remains the go-to platform for global investors. According to Fariq, the growth of IBIT options expands the market, increasing sophistication and flow, and ultimately benefiting venues like Deribit.