BlackRock’s IBIT Bitcoin ETF Leads BTC Futures Market With $38 Billion Open Interest, Surpasses Coinbase’s Deribit

Wall Street investment and asset management giant BlackRock’s flagship Bitcoin product, the iShares Bitcoin Trust ETF (IBIT), the largest spot crypto exchange-traded fund (ETF) by assets under management, has now taken the mantle of the largest BTC options trading vehicle in the futures market.

According to a recent X post by Bloomberg ETF analyst Eric Balchunas, open interest (OI) in options tied to the Nasdaq-listed IBIT reached nearly $38 billion following contract expiry last Friday, overtaking Coinbase’s crypto derivatives trading platform Deribit, which has an OI of $32 billion.

iShares Bitcoin ETF Becomes Largest BTC Options Trading Vehicle with $38 Billion in Open Interest

This marks another milestone for IBIT, which only started trading in January 2024. In June, the fund that offers retail and institutional investors exposure to bitcoin’s price performance without requiring them to directly purchase, store, or manage the asset, surpassed $70 billion in assets under management (AUM) in 341 trading days. This is the fastest rate at which any ETF has reached that level in history.

For comparison, it took 1,691 days for the SPDR Gold Shares (GLD) ETF to hit the same milestone, while other major funds such as VOO, IEFA, and IEMG took between 1,700 and 2,000 days to get to the $70 billion mark. The very next month, IBIT hit an AUM of $80 billion, nearly five times faster than Vanguard’s S&P 500 ETF, which achieved the feat in 1,814 days. 

The fund’s rapid growth coincided with bitcoin’s rally during that time. In August, IBIT’s total bitcoin holdings reached $84 billion, widely benefiting from a virtuous market cycle, which saw the apex cryptocurrency record its current all-time high of $124,000, as increased options liquidity and enhanced credibility helped attract more capital and deepen the market.

Deribit, which has dominated the bitcoin options market for years, was acquired by Coinbase in a $2.9 billion deal in June 2005, highlighting just how massive the options trading market is. However, it is the ETFs that are more popular among crypto derivative products, as reflected by the $38 billion OI for the iShares Bitcoin Trust ETF.

BlackRock is driving institutional demand for the world’s largest cryptocurrency by market cap with IBIT, consistently outpacing other spot bitcoin ETFs in daily inflows. With the fund now extending its influence into the bitcoin derivatives market, experts suggest that $12 trillion asset manager could soon play a decisive role in price discovery and volatility for the asset.

Wall Street is Starting to Dominate the Bitcoin Options Market

While Deribit has a significant market share, data shows that the platform’s OI fell sharply over the last few days. A whopping $21 billion in BTC and ETH (Ether) options contracts expired last week, creating a massive stress test for derivatives exchanges. However, this wasn’t a problem for the ETFs. While the exchange-traded product faced similar setbacks, it was able to mitigate them more effectively.

An advantage BlackRock’s IBIT has in the options market is that it offers tighter bid-ask spreads than its counterparts, further boosting its rise to prominence. Regardless of platform, high open interest for bitcoin options is a bullish signal for the broader cryptocurrency market. As BTC’s price continues to rise, investor exposure is starting to diversify.

Experts also warned about the potential downsides to ETFs becoming the preferred vehicles for bitcoin options trading, as the reshuffling of leadership in the derivatives market signals Wall Street’s growing dominance over the Bitcoin ecosystem.

At the time of writing, Bitcoin (BTC) is trading at $120,467, up 1.41% in the last 24 hours.