Options tied to BlackRock’s spot Bitcoin ETF (IBIT), which began trading on November 19, have quickly gained significant traction, now making up almost half the size of Deribit’s well-established Bitcoin options market.
The growing demand for regulated crypto products in the U.S. is evident as the U.S. SEC-approved IBIT options have surged in popularity. As of Monday, there were 2.16 million open IBIT options contracts, with a total notional value of $11 billion, according to data from optioncharts.io. This is calculated by multiplying the open interest by the ETF’s price and the lot size of 100.
The current IBIT options volume represents 50% of the $23 billion in open BTC options on Deribit at the time of reporting, with each Deribit option contract representing one Bitcoin.
Options are financial derivatives that give buyers the right, but not the obligation, to buy or sell an underlying asset at a specified price by a certain date. A call option grants the right to buy, while a put option gives the right to sell. Crypto options, like their traditional market counterparts, are used by traders to speculate on or hedge against price movements, volatility, and time decay.
For years, Deribit has been the leading platform for Bitcoin and Ether options, where traders have employed complex strategies. However, Deribit’s offshore status limited access for U.S.-based investors seeking regulated markets. IBIT options have stepped in to fill this gap.
“With BlackRock’s spot Bitcoin ETF as its underlying asset, IBIT options attract both institutional investors and U.S. retail traders who prefer regulated markets. The rapid growth of this market segment is reflected in the increasing demand for IBIT options,” said Volmex Finance, a crypto derivatives protocol, in an email to CoinDesk.
According to Volmex, the rise of IBIT options is challenging Deribit’s dominance in the crypto options space. However, Deribit’s CEO, Luuk Strijers, sees the entry of IBIT options as a positive development for the industry.
“IBIT options are primarily traded by U.S. retail investors, a group that has historically not had access to Deribit. Their entry into the market has not negatively impacted our activity. On the contrary, it has created new arbitrage opportunities and helped enhance risk management strategies for institutional participants, as Deribit continues to serve as the global hub for risk and volatility,” Strijers explained.
He also noted that the IBIT options market is primarily focused on short-dated options, signaling strong demand for lower-premium contracts.
