Options tied to BlackRock’s spot Bitcoin ETF (IBIT), which began trading on November 19, have seen remarkable growth, now accounting for nearly half of Deribit’s total Bitcoin options market.

The surge in demand for regulated crypto products in the U.S. has become evident as IBIT options, approved by the U.S. SEC, continue to gain traction. As of Monday, there were 2.16 million open IBIT options contracts, with a notional value of $11 billion, according to optioncharts.io. This value is derived from multiplying the open interest by the ETF’s price and the lot size of 100.

At this point, IBIT options make up about 50% of the $23 billion in open Bitcoin options on Deribit, with each option on Deribit representing one Bitcoin.

Options are financial instruments that allow traders the right, but not the obligation, to buy or sell an underlying asset at a set price before a specified expiration date. These derivatives are used for speculation or risk management, often to profit from price volatility or hedge against price movements.

For years, Deribit has been the dominant platform for Bitcoin and Ether options, providing traders with tools to implement various strategies. However, the platform’s offshore nature kept U.S.-based investors seeking regulated trading avenues at bay. With the launch of IBIT options, this gap is now being addressed.

“IBIT options, backed by BlackRock’s Bitcoin ETF, have quickly gained popularity among both institutional and retail investors in the U.S., thanks to their regulated status. This rising demand for IBIT options is reshaping the landscape,” said Volmex Finance, a crypto derivatives protocol, in an email to CoinDesk.

Volmex noted that IBIT options are challenging Deribit’s long-held dominance in the crypto options market. However, Deribit’s CEO, Luuk Strijers, remains positive about the development.

“The influx of U.S. retail investors into IBIT options has not negatively impacted our market. If anything, it has opened new arbitrage opportunities and improved risk management strategies for institutional traders,” Strijers said.

He also pointed out that IBIT options activity is concentrated in short-dated options, suggesting a strong demand for lower-premium contracts. This highlights the shifting dynamics of the crypto derivatives market.