A significant development occurred on Friday, marking the accelerating 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 have surpassed the total bitcoin options trading on Deribit, a major offshore platform. Notably, IBIT options have bridged the gap with Deribit's bitcoin options market in just two years, despite Deribit's head start since 2016.
On Friday, the open interest in IBIT options contracts on Nasdaq reached $27.61 billion, slightly exceeding the $26.90 billion in Deribit's bitcoin options, according to data from Volmex. This milestone signifies 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 may encourage more Wall Street institutions to explore digital assets, 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 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.
The two markets, though similar in scale, 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 investment horizon, with IBIT options expiries preferred in October 2026, while Deribit expiries dominate in August.
Lastly, IBIT's implied volatility is higher than Deribit's, attributed to the demand for put options among ETF holders. The rapid rise of IBIT in the options market is striking, and while it rivals Deribit in scale, the two are not direct substitutes, catering to different investor bases.
According to Fariq, the expansion of the market benefits all participants, including Deribit, as increased sophistication and flow ultimately feed into the broader ecosystem.