A significant development occurred on Friday, marking the accelerating institutionalization of the bitcoin market, which has been driven by individual investors for years. 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 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 dollar value of open IBIT options contracts on Nasdaq, known as open interest, reached $27.61 billion, slightly higher than Deribit's $26.90 billion, 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. 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 an 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 differ in positioning, revealing insights into 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. In contrast, Deribit options positioning is more conservative, with call open interest clustered around levels equivalent to roughly $106,000 in BTC terms. The average delta of onshore call options 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. Notably, IBIT options have expiry dates, with October 2026 expiries being preferred, while August expiries dominate on Deribit.
This suggests that IBIT options are approximately two months longer-dated on an OI-weighted basis, reflecting the underlying holder base of longer-horizon ETF investors onshore versus more tactical positioning offshore. 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 demand for put options and elevated implied volatility. Overall, IBIT's rapid rise in the options market is striking, and the two markets are not direct substitutes, with IBIT options catering to regulated, onshore investors and Deribit remaining the go-to platform for global investors.