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 has surpassed the total bitcoin options trading on Deribit, a major offshore platform. 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 exceeding the $26.90 billion in Deribit's bitcoin options, according to data from Volmex. This milestone indicates that the US-based, regulated bitcoin investment and derivatives infrastructure is no longer secondary to the offshore market. The 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 rise as a positive development for the broader crypto derivatives ecosystem. "US retail cannot access platforms like Deribit, so iShares Bitcoin Trust (IBIT) options provide them with direct access to regulated leverage and options exposure. This is supported by the current macro environment, which drives demand for hedging and options strategies," Fariq stated. Options are derivative contracts that grant the purchaser the right to buy or sell the underlying asset at a predetermined price at a later date.
Analysts use open interest to measure market size and participation, with higher open interest indicating a deeper and more liquid market. Traders utilize options to hedge existing positions, speculate on price direction, and generate income on coin/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 shape, 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, or roughly 41% above the current price. Positioning in Deribit options is also concentrated on the higher side but is slightly more conservative.
"Onshore call OI is concentrated roughly 4 percentage points further out-of-the-money than offshore, and the onshore average delta is slightly lower. This is consistent with onshore flow being dominated by retail upside speculation and systematic call overwriting programs," Volmex noted. Put positioning is largely aligned across venues, with open interest concentrated around the $63,500 strike.
ETF holders tend to be more patient, with options having expiry dates. Analysis of activity across both markets suggests that, on average, October 2026 expiries are preferred in IBIT, while August expiries dominate on Deribit. Lastly, IBIT's implied volatility is higher than the implied volatility derived from Deribit's BTC options, which Volmex attributes to a structural quirk.
All things considered, IBIT's rapid rise in the options market is striking and now appears to rival Deribit in scale. However, the two are not direct substitutes, as IBIT options primarily cater to regulated, onshore investors accessing bitcoin exposure through traditional brokerage channels, while Deribit remains the go-to place for global investors. "I don’t see this as competition. If anything, it expands the market.
As more participants get comfortable trading options via IBIT, it ultimately feeds into the broader ecosystem, and venues like Deribit benefit from increased sophistication and flow," Fariq said.