A significant development occurred on Friday, marking a milestone in the institutionalization of the bitcoin market, which has been driven by individual investors for years. This is due to the growth of options linked to BlackRock's bitcoin exchange-traded fund (ETF), IBIT, on Nasdaq, which has surpassed the total bitcoin options trading on the offshore platform Deribit. 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, also known as open interest, reached $27.61 billion, slightly higher than Deribit's $26.90 billion, according to data from Volmex.
This achievement indicates that the regulated, institutional-grade bitcoin investment and derivatives infrastructure in the US is now on par with the offshore market. 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.
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 or ETF holdings. One popular 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.
Although the two markets now match in scale, they differ in positioning, revealing distinct trader sentiment. According to Volmex, the bulk of open interest in IBIT call options is concentrated at higher strike levels, while Deribit options positioning is more conservative.
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.
Lastly, 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. Overall, IBIT's rapid rise in the options market is notable, and while it may rival Deribit in scale, the two are not direct substitutes, catering to different investor bases.
As more participants become comfortable trading options via IBIT, it is likely to expand the market and benefit the broader ecosystem, including venues like Deribit.