A notable development occurred on Friday, marking a significant milestone in the institutionalization of the bitcoin market, which has been driven by individual investors for years. This milestone was achieved when the open interest in options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, surpassed that of 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 Deribit's $26.90 billion, according to data from Volmex. This development indicates that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is now on par with the offshore market. The growth of a regulated market in the US could encourage 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 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. 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 implied volatility by holding the ETF and shorting IBIT calls. The two markets, though similar in scale, reveal different trader sentiments. According to Volmex, the open interest in IBIT call options is concentrated at strike levels equivalent to bitcoin trading around $109,709, while Deribit's call open interest is clustered around levels equivalent to roughly $106,000 in BTC terms.
The positioning of put options is largely aligned across venues, with open interest concentrated around the $63,500 strike. ETF holders tend to have a longer investment horizon, with October 2026 expiries preferred in IBIT, while August expiries dominate on Deribit. 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 in the options market is striking, and while it rivals Deribit in scale, the two are not direct substitutes, catering to different types of investors.
According to Fariq, the growth of IBIT options expands the market, increasing sophistication and flow, and ultimately benefiting venues like Deribit.