IBIT Surpasses Deribit to Become Largest Bitcoin Options Platform

BlackRock’s Bitcoin ETF is currently the largest venue for BTC options trading, reaching a whopping $38 billion in open interest. The product surpassed Deribit, a derivatives exchange owned by Coinbase, to achieve this goal.

This record could serve as a bullish data point for crypto ETFs, as IBIT was better-equipped to deal with setbacks last month. Still, in the long run, a TradFi takeover could cut into crypto margins.

Bitcoin Options Have a New King

With Bitcoin options traders preparing for Uptober, it’s important to remember just how huge this market really is. Four months ago, Coinbase agreed to a $2.9 billion deal to purchase Deribit, the popular derivatives exchange, and the firm’s stock rose 37% during the negotiations.

Last month, Coinbase completed this deal to make bold expansions in the Bitcoin and crypto options markets. However, the BTC ETFs are apparently even more popular than this platform, with BlackRock’s IBIT reaching a mesmerizing $38 billion in open interest:

Experts already called IBIT the “greatest launch in ETF history,” but this really puts the asset’s prominence in perspective. Even while Bitcoin ETFs saw institutional outflows and deflated gains in September, this single product has still come to dominate the options market.

An ETF Takeover?

To be fair, the graph clearly shows that Deribit’s open interest fell sharply in the last few days, which is an important component of this crossover. A record-breaking $21 billion in Bitcoin and Ethereum options expired last week, creating a huge stress-test for derivatives exchanges.

Still, this evidently wasn’t a comparable problem for ETFs.

This data point is a handy piece of evidence supporting ETFs’ growing stature. Both IBIT and Deribit faced important setbacks last month, but the ETF has apparently weathered them more effectively.

Considering that a flood of altcoin ETFs may hit the markets after the US government shutdown ends, this could be very useful information.

Regardless of which venue is more successful, this high open interest for Bitcoin options trading is a bullish signal. While BTC’s price continues to rise, the markets show a diversified appetite.

Still, there might be some potential downsides to this approach. As TradFi institutions like BlackRock become the preferred vehicles for Bitcoin options trading, it may become harder to achieve the same rapid price gains that crypto is famous for.