A significant development occurred on Friday, highlighting the rapid 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 Deribit, a major offshore player. 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, slightly higher than Deribit's $26.90 billion, according to data from Volmex.
This milestone indicates that the US-based, regulated bitcoin investment and derivatives infrastructure is now on par with the offshore market, potentially encouraging more Wall Street institutions to explore digital assets and 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, 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, and analysts use open interest as a measure of market size and participation. Traders utilize options to hedge existing positions, speculate on price direction, and generate income on coin or ETF holdings.
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, though similar in size, differ in shape, with IBIT call options concentrated at higher strike levels, indicating a more bullish sentiment. According to Volmex, the bulk of open interest in IBIT call options is focused on strike levels equivalent to bitcoin trading around $109,709, roughly 41% above the current price. In contrast, Deribit options positioning is more conservative, with call open interest clustered around $106,000 in BTC terms.
The average delta is slightly lower for onshore flow, consistent with 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 have a longer-term perspective, with October 2026 expiries preferred in IBIT, 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.
Overall, IBIT's rapid rise in the options market is striking, and while it may rival Deribit in scale, the two are not direct substitutes, catering to different types of investors. According to Fariq, this development expands the market, increasing sophistication and flow, and ultimately benefiting the broader ecosystem.