A notable development occurred on Friday, highlighting the accelerating pace of institutional investment 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 become more prominent on Nasdaq than total bitcoin options trading on the offshore platform Deribit. 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, surpassing the $26.90 billion in Deribit's bitcoin options, according to data from Volmex.
This milestone indicates that the US is no longer secondary to the offshore market in terms of regulated, institutional-grade bitcoin investment and derivatives infrastructure. The rise of a booming, regulated market in the US could encourage more Wall Street institutions to explore digital assets, ultimately 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 grant the purchaser the right to buy or sell an underlying asset at a predetermined price at a later date. 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 BTC's implied volatility by holding the ETF and shorting IBIT calls at levels above the ETF's current market price. The two markets, though similar in scale, 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, roughly 41% above the current price. In contrast, Deribit options positioning is slightly more conservative, with call open interest clustered around levels equivalent to roughly $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.
The implied volatility of IBIT options is higher than that of Deribit's BTC options, attributed to the demand for put options from ETF holders who cannot easily short bitcoin directly. Overall, IBIT's rapid rise in the options market is striking, and it now appears to rival Deribit in scale. However, the two are not direct substitutes, as IBIT options primarily cater to regulated, onshore investors, while Deribit remains the go-to platform for global investors. According to Fariq, this development expands the market, increasing sophistication and flow, and ultimately benefiting venues like Deribit.