A notable development occurred on Friday, marking a significant milestone in the accelerating institutionalization of the bitcoin market. This is due to the growth of options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, which have become slightly larger on Nasdaq than the total bitcoin options trading on Deribit. It is striking that IBIT options have closed the gap with Deribit's bitcoin options market in just two years, despite Deribit operating since 2016.
On Friday, the dollar value of open IBIT options contracts on Nasdaq, also known as open interest, was $27.61 billion, surpassing the $26.90 billion in Deribit's bitcoin options. This achievement signals that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is no longer secondary to the offshore market. Furthermore, a thriving, 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,' Fariq stated. The current macro environment, characterized by supply chain uncertainty, energy shocks, and geopolitical risks, naturally drives demand for hedging and options strategies.
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 as a measure of 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 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 shape, revealing distinct trader sentiments. According to Volmex, the majority 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 more conservative, with call open interest clustered around levels equivalent to approximately $106,000 in BTC terms. 'Onshore call OI is concentrated roughly 4 percentage points further out-of-the-money than offshore, and the onshore average delta is slightly lower,' Volmex noted.
This disparity is consistent with onshore flow being dominated by retail upside speculation and systematic call overwriting programs. Put positioning, however, 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 that depend on the settlement price of IBIT or spot BTC. Analysis of activity across both markets suggests that, on average, October 2026 expiries are preferred in IBIT, while August expiries dominate on Deribit. 'IBIT options are approximately two months longer-dated on an OI-weighted basis,' Volmex observed. Lastly, IBIT's implied volatility is higher than the implied volatility derived from Deribit's BTC options, which Volmex attributes to a structural quirk: ETF holders cannot easily short bitcoin directly, so they buy put options as their only available hedge.
This demand for put options keeps IBIT's implied volatility slightly elevated. 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 accessing bitcoin exposure through traditional brokerage channels, while Deribit remains the go-to platform 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.