Options Nearly Double Their Share as Crypto Derivatives Market Shifts: Report

Options are taking a larger role in crypto derivatives as traders increasingly use them for hedging and volatility trading. Crypto derivatives markets are moving toward two main products, perpetual futures and options. Perpetuals provide continuous leverage, while options are becoming more important for pricing and managing risk. That shift is also visible in how traders are allocating capital across derivatives. A Glassnode study produced with Bybit found that options increased their share of Bitcoin notional open interest from about 25% to nearly 50%. Meanwhile, dated futures have lost ground in the crypto market. Options Are Becoming More Important Dated futures volume is now roughly 97% below its 2021 level, according to the study. Perpetual futures have taken a larger role in leverage, while options have gained ground in volatility trading and hedging. The growth in options has not been limited to bullish market conditions. Glassnode found that options gained market share in four of the five market regimes it examined since 2019. The largest increase came during a prolonged bear market, when demand for hedging can become more important. This suggests that traders use options n...