Options linked to BlackRock’s Bitcoin ETF rise to almost 50% of Deribit’s BTC open interest in two months

Government demand for regulated crypto products is real.

US SEC-approved options linked to BlackRock’s bitcoin (BTC) exchange-traded fund (IBIT), which debuted on November 19, are nearly half the size of Deribit. eight years old bitcoin options market.

As of Monday, there were 2.16 million open or active IBIT options contracts, worth $11 billion, according to data source optcharts.io. This notional value is obtained by multiplying the open interest by the ETF price and the lot size by 100.

That’s 50% of the $23 billion locked At press time, BTC options are open on Deribit. One option contract on Deribit represents one BTC.

Options are derivative contracts that give the buyer the right to buy or sell the underlying asset at a specified price at a later date. A call offers the right to buy, while a put offer offers the right to sell.

Similar to traditional markets, traders use crypto options to speculate or hedge against price fluctuations, volatility and time exposure (called theta).

Deribit has been at the forefront for years, with traders and investors using its bitcoin and ether options to create complex directional and non-directional strategies. However, the stock’s offshore status has forced US-based investors to seek regulated avenues in the Gulf. IBIT Options is stepping in to fill this gap.

“With BlackRock’s spot Bitcoin ETF as its core asset, IBIT options appeal not only to institutional investors, but also to US retail traders who prefer regulated markets. This rapidly expanding segment is reflected in the growing demand for IBIT options,” Volmex Finance, Crypto Derivatives . protocol, CoinDesk reported via email.

Volmex added that the growing popularity of IBIT options challenges Deribit’s dominance in the crypto options market. However, Deribit CEO Luuk Strijers said that IBIT options have created positive ripple effects for the industry.

“IBIT options are traded primarily by US retail investors, a segment that historically has not had access to Deribit. Thus, their activation has not had a negative impact on our market activity. If anything, it has created positive results by introducing new arbitrage opportunities and facilitating Deribit continues to play a role as a global repository of risk and volatility as risk mitigation strategies for institutional participants are enhanced, CoinDesk reported.

Strygers explained that activity in IBIT options is concentrated in short-term options, indicating demand for lower premium (price) options.