Options now account for nearly 50% of total notional open interest in Bitcoin derivatives, up from approximately 25% in previous periods. This shift marks a significant structural change in the crypto market, as traders move away from dated futures, which have seen their volume decline by 97% since their 2021 peak.
According to a report by Glassnode and Bybit, perpetual futures have become the preferred instrument for directional trading, while options are increasingly used for risk management and event-specific strategies. Options gained market share in four out of five market regimes analyzed since 2019, particularly during bear markets.
Bybit has expanded its market share of Bitcoin options volume to 28%, compared to less than 10% at the time of its launch. The exchange's open interest in options grew from $529 million to $2.33 billion. Additionally, Bybit has led Ether options volume for 143 consecutive days.
The growth of options liquidity enables the use of complex trading strategies, such as collar strategies, risk reversals, and calendar spreads. As the market matures, dealer hedging activity may influence spot market volatility, bringing the crypto derivatives landscape closer to traditional equity and commodity markets.
