Why IBIT Options Traders Paid a Premium for Protection

Bitcoin

Derivatives

30/09/2025

Today we’ll explore how options on TradFi and Crypto markets are pricing risk. With the advent of spot crypto exchange-traded funds and options based on these products the two markets are converging in parts. However, discrepancies persist due to lower volumes and the unpredictable nature of risk events.

Trend of the Week

Since the launch of spot BTC ETFs traditional venues have been increasingly encroaching on crypto native platforms. Looking at the volume of spot BTC ETFs versus crypto exchanges shows that around 40% of the total volume traded on platforms and products available to U.S. retail and institutional investors comes from IBIT alone

Now traditional players have turned their attention to options markets, with IBIT options picking up steam. While trade volumes are often comparable between IBIT and Deribit, there are some large discrepancies. One of those is around tail-risk pricing. IBIT tends to have a much higher skew at times, especially evident in January of this year.

We explore why this “fear premium” exists on IBIT options and how at-the-money implied volatility is being priced. Sign up below for the full report.

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