Regulated Options Market Surpasses Crypto-Native Counterpart in Bitcoin Trading

The regulated US options market has surpassed its offshore crypto-native counterpart in terms of open interest. IBIT's $2.4 billion notional open interest for September is a record that outshines gold ETF records. The dominance of IBIT options in the Bitcoin market is evident, capturing 75% to 80% of total Bitcoin spot ETF options trading volume.

The average daily volume on IBIT reaches $2.7 to $3.0 billion, with an average of 600,000 to 650,000 contracts traded daily. This translates to a massive liquidity gap, with put bid-ask spreads staying at $0.02 for strikes near the current price.

In comparison, FBTC has a bid-ask spread of $0.45 and holds only 11% of the total volume. IBIT's raw contract open interest sits at 7 million, putting the total USD notional value at $31.5 billion. This exceeds GLD's total options notional value of $30 billion.