The surge in IBIT option volume and its impact on Bitcoin liquidity

IBIT options command a liquidity tier of their own

IBIT options dominate the Bitcoin derivatives market through massive open interest. The current open interest for IBIT options totals 148,216 contracts. Within this figure, call open interest reaches 110,493 while put open interest stays at 37,723. This heavy call bias creates a put-call open interest ratio of 0.34. The aggregate open interest for IBIT options holds 6.5 million contracts, a volume that eclipses FBTC by 61 times and GBTC by 150 times. I observe a 30-day median bid/ask spread of only 0.02% for IBIT. This tight spread provides superior liquidity compared to BITB, which shows a 30-day median spread of 0.03%. I note that IBIT has gathered around $63 billion in net assets. The fund’s popularity led it to exceed 100 million shares traded twice this year. I find the massive volume in IBIT makes it the primary trading center for Bitcoin ETFs. IBIT traded about 50 million shares on average over the last 30 days. I see the share price near $54. IBIT launched on January 5, 2024, and the SEC approved options on IBIT in September 2024.

Regulatory expansion and market depth

Nasdaq ISE proposes increasing the position and exercise limits for IBIT options to 1,000,000 contracts. The exchange currently restricts these limits to 250,000 contracts. This proposal follows an ongoing increase in demand for IBIT options throughout 2025. I calculate that the average daily volume for IBIT reached 44,590,758 shares during the 180 days before September 22, 2025. The market capitalization for IBIT reached $86,243,795,200 during that same timeframe. Raising the limits would place IBIT in the same category as the iShares MSCI Emerging Markets and the iShares China Large-Cap ETF. The exchange claims the current 250,000 contract limit restricts the ability of market makers to provide liquid markets with tighter spreads. This restriction affects investors seeking effective hedging vehicles or income generating strategies. I see that IBIT’s market capitalization now exceeds the AUM of the iShares China Large-Cap ETF, which holds $6,641,144,520. The proposed increase aims to facilitate better hedging for large investors. I note the average daily volume for the iShares MSCI Emerging Markets stays at 25,951,152 shares. The average daily volume for the iShares China Large-Cap ETF reached 37,112,065 shares, which significantly exceeds the volume of smaller competitors. Will the increased limits invite more speculative volatility into the Bitcoin market?

IBIT remains the best option for traders

I recommend IBIT for traders seeking low costs and high trading utility. The 0.25% annual expense ratio provides a clear advantage over the 1.50% fee charged by GBTC, making it more attractive for long-term holds. I find the liquidity in IBIT options far more reliable than in smaller products. You probably already know that higher fees erode your long-term returns. I see significant differences in how these products perform for long-term holders as they battle volatility.

IBIT holds Bitcoin 1:1, which avoids the roll decay seen in BITO. BITO carries a 0.95% fee and experienced an 8.4% performance gap compared to Bitcoin’s price movement over the last year. BITO holds 70.92% in CME Bitcoin Futures for February 2026 and 25.80% in CME Bitcoin Futures for March 2026. I find the 1.50% fee on GBTC too high for most portfolios because it erodes returns over time. GBTC holds about 158,000 BTC with assets worth roughly $11 billion. GBTC’s 5-day volatility reached 294.25% in February 2026, which highlights the risk for sudden price swings. IBIT’s 30-day median spread of 0.02% beats the 0.03% spread seen in BITB and the 0.11% spread in WisdomTree’s BTCW. I note that IBIT’s cumulative total return since inception reached 98.49%. BITO reported a 12-month yield of 82.01% despite a NAV total return of -21.14%.