BlackRock’s IBIT Topples Deribit as Wall Street’s Bitcoin Options Powerhouse

BlackRock’s iShares Bitcoin Trust (IBIT) has officially seized the crown from Deribit, becoming the world’s largest venue for bitcoin options trading and signaling a profound structural shift in the crypto derivatives market. In less than a year since IBIT options went live in November 2024, open interest in IBIT contracts surged to nearly $38 billion—surpassing Deribit’s $32 billion, a seat it had held since 2016.

IBIT’s Meteoric Rise

BlackRock’s IBIT launched as the first U.S.-listed spot bitcoin ETF and rapidly accumulated $84–$87 billion in assets under management, making it the largest bitcoin ETF globally. The ETF’s introduction of regulated options trading provided Wall Street institutions a compliant and transparent gateway for both hedging and income-generating strategies, such as covered call options. This surge has catalyzed a positive liquidity cycle: increased options volume attracts large-scale institutional flows, leading to even deeper market participation and enhanced credibility for regulated products.

A Declining Offshore Stronghold

For years, Deribit was the dominant offshore options exchange, favored by crypto-native traders for high-leverage products and minimal regulatory oversight. Its recent acquisition by Coinbase for $2.9 billion underlines its ongoing importance, but the fact remains—IBIT’s ascent underscores a major migration of liquidity and price discovery from offshore venues to the regulated U.S. market. Today, IBIT accounts for around 45% of global bitcoin options open interest, while Deribit holds just under 42%, with the CME trailing far behind.

Institutional Adoption Redefines Market Structure

The rapid pivot toward regulated choices reflects Wall Street’s growing stake in crypto assets and derivatives. Institutional investors now prefer products with robust compliance, reliable custody (Coinbase Prime serves as IBIT’s custodian), and lower costs—IBIT’s expense ratio stands at 0.25%, reduced to 0.12% for early investors, playing a role in its runaway success. This “institutionalization” of crypto has profound implications, transforming bitcoin from a speculative commodity to a mainstream asset class woven into macro portfolios and risk management frameworks.

What’s Next?

As options linked to IBIT continue to grow in volume, they are reshaping both risk strategies and price discovery in the bitcoin market. BlackRock has further signaled its ambitions by filing for a Bitcoin Premium Income ETF, designed to provide yield through systematic options selling strategies on IBIT holdings. The regulated, ETF-driven landscape is growing at the expense of high-leverage offshore venues and is likely to remain the structural force in the evolution of bitcoin derivatives for years to come.