A notable development occurred on Friday, marking a significant milestone in the accelerating institutionalization of the bitcoin market. 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.
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 the $26.90 billion in Deribit's bitcoin options. This achievement indicates that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is no longer secondary to the offshore market.
The rise of IBIT options is expected to embolden more Wall Street institutions to explore digital assets, ultimately leading to more mature price discovery. According to Sidrah Fariq, Deribit's Global Head of Retail Sales and Business, the growth of IBIT options is a net positive 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 the 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 additional 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 simultaneously holding the ETF and shorting IBIT calls at levels well above the ETF's current market price. The two markets, though similar in scale, are positioned differently, revealing distinct 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, while positioning in Deribit options is slightly more conservative.
The average delta is lower for onshore flow, which is 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. ETF holders tend to be more patient, 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 a structural quirk where ETF holders cannot easily short bitcoin directly and instead buy put options as a hedge.
The rapid rise of IBIT options is striking, and while they may not be direct substitutes for Deribit, they primarily cater to regulated, onshore investors accessing bitcoin exposure through traditional brokerage channels. The growth of IBIT options is expected to expand the market, increasing sophistication and flow, and ultimately benefiting venues like Deribit.