Options Gain Ground as Crypto Derivatives Market Shifts Towards Perpetual Futures

The crypto derivatives market is undergoing a significant shift, with options nearly doubling their share of Bitcoin notional open interest. According to a study produced by Glassnode and Bybit, options now account for around 50% of Bitcoin's notional open interest, up from about 25%. This marks a decline in the use of dated futures, which have seen their volume drop to roughly 3% of its 2021 level.

The growth of options has not been limited to bullish market conditions. In fact, Glassnode found that options gained market share in four out of five market regimes since 2019, including a prolonged bear market when demand for hedging is particularly important.

Bybit's options market has also seen significant growth, with its options book rising from $529 million to over $2.33 billion. The platform's share of Bitcoin options volume across four crypto-native venues rose from below 10% to 28%, while Bybit recorded the highest Ether options volume among the four venues for 143 consecutive days.