Current State of the Crypto Options Market

Oct 27

8 min read

October 2026

By Orbit Markets

Key Points

Crypto options now trade about $7.3 bn a day across the eight largest venues (Q3 2026 average).
Deribit remains the largest venue with a 28.6% share, with IBIT options close behind at 27.6%.
Kalshi recorded $8.9 billion in crypto event contracts in September 2026, making it the largest venue by premium paid.
OTC remains the main channel for altcoin options, exotics and structured products.

1. Market Growth

Over the past few years, crypto options have evolved from a niche product into a mainstream market, with average daily volume exceeding $7 billion. Compared with the previous cycle, the market is now larger and more liquid, more institutionally driven, less concentrated in a single venue, and more diversified across products and trading channels.

Table 1: Major crypto options venues by average daily volume (ADV), Q3 2026

Venue	Type	ADV ($ bn)	Share
Deribit	Crypto-native exchange	2.10	28.6%
IBIT	US-listed ETF options	2.03	27.6%
Bybit	Crypto-native exchange	1.42	19.3%
Binance	Crypto-native exchange	0.97	13.2%
OKX	Crypto-native exchange	0.60	8.2%
Bullish	Crypto-native exchange	0.10	1.3%
Derive	DeFi protocol	0.08	1.1%
CME	US futures exchange	0.04	0.6%
Total		7.33	100%

Sources: Orbit Markets, The Options Clearing Corporation, The Block, DefiLlama.

The market is now served through three main channels:

Crypto-native exchanges account for about 72% of listed volume and lead on liquidity and ease of access.
Traditional regulated venues account for about 28%, almost all of it IBIT, and are growing on institutional flows.
The OTC market is not captured in Table 1 and serves bespoke trades, altcoins and structured products.

2. Crypto-Native Exchanges

The competitive landscape among crypto-native options exchanges can be broadly divided into three tiers:

Top tier: Deribit, the first mover and still the market leader.
Second tier: Bybit, Binance and OKX, all rapidly expanding their presence.
Third tier: Bullish and Derive, emerging and niche players.

Deribit once accounted for more than 90% of crypto options volume at its peak, but its market share has gradually declined to around 29% today. Despite this loss of share, its absolute volume has continued to grow. Annual volume increased from $373 billion in 2023 to a record $1.35 trillion in 2025, while 2026 volume is running at an annualised $848 billion—below 2025 levels but still above 2024.

Figure 1: Deribit annual options volume ($ bn)

Source: Orbit Markets, Deribit.

This trend reflects the expansion of the overall options market rather than a redistribution of existing flows. Deribit has historically catered to crypto-native institutions, leaving two major segments relatively underserved: crypto retail traders and traditional financial institutions. Bybit, Binance and OKX tapped into the former by converting their established retail user bases into options traders. Meanwhile, IBIT provided traditional institutions with a more familiar entry point into crypto options through a regulated venue. Together, these platforms have broadened the market by attracting incremental flows and diversifying the participant base, rather than simply diverting volume from Deribit.

More recently, Coinbase completed its integration of Deribit in October 2026, paving the way for US institutions to access Deribit options, with retail access planned for later in the year. This expansion into the US market could unlock a significant new source of volume for Deribit.

As growth in the spot and perpetual markets has stalled, leading crypto exchanges have invested in options as a new revenue stream. Bybit, Binance and OKX have gained share rapidly by leveraging their existing user bases, broader ecosystems and deep spot and perpetual liquidity.

Across venues, Orbit Markets now facilitates approximately $1 billion in daily notional volume, representing roughly 10-15% of the market.

The range of available underlyings has also expanded. Until a few years ago, options were available only on BTC and ETH. Today, exchanges list options on around a dozen tokens, including SOL, XRP and HYPE. However, activity in altcoin options remains limited. Volume is still heavily concentrated in BTC and ETH: in September 2026, BTC accounted for 75% of total volume, ETH for approximately 24%, and all other tokens combined for just 1%.

3. Traditional Exchanges

CME launched crypto options in 2020, offering regulated access, but struggled to gain meaningful traction.

The launch of options on IBIT in November 2024 changed the competitive landscape. IBIT options have grown rapidly and are now the second-largest crypto options venue, with volume almost on par with Deribit. A number of factors drove this growth:

Standard stock options. IBIT options are standard US-listed equity options, traded through the same brokerage accounts used for stocks such as NVDA and AAPL. This made them accessible to a vast existing pool of brokerage customers from day one, without requiring new account types, specialised onboarding or new collateral arrangements.
Natural demand. IBIT options also benefited from an immediate base of natural users. ETF holders can sell covered calls to generate income or buy protective puts to hedge downside risk.
Structured products. Banks and structured-product issuers added another source of demand. They could use IBIT options to issue bitcoin-linked notes to their private wealth clients while relying on their existing systems and distribution channels.
Hedge funds. As liquidity deepened, hedge funds also entered the market to express directional views and implement relative-value strategies through options.

Traditional and crypto-native exchanges serve distinct participant bases. Access barriers persist in both directions. Most traditional institutions cannot trade on crypto-native exchanges because of regulatory and compliance constraints. Conversely, crypto-native players may face practical hurdles when accessing traditional exchanges. The two segments are connected but not fully fungible, which sustains pricing differences and arbitrage opportunities. Participants able to access both markets can exploit relative-value dislocations, although capital constraints and operational frictions may limit how quickly those differences close.

Table 2: Crypto-native vs traditional exchanges

	Crypto-native	Traditional (IBIT, CME)
Trading hours	24/7	Exchange hours only
Access	Direct	Through brokers and intermediaries
Expiries	Daily and short-dated	Standard listed cycles
Collateral	Crypto and stablecoins	Cash and securities
Main users	Funds, trading firms, global retail	Banks, hedge funds, US retail

4. OTC Options Market

The OTC market is a critical complement to exchange-traded options, particularly for:

Unlisted or illiquid tokens, where exchange-traded options may be unavailable or lack sufficient liquidity.
Flexible maturities and settlement terms, tailored to specific hedging or investment needs.
Non-vanilla payoffs and customised structures, designed around particular market views and investment objectives.

Table 3: Main OTC users

User	Typical use
Crypto funds	Directional views
Miners	Hedging future production
Family offices	Asset allocation; accumulation through structured products
Foundations	Yield strategies, such as selling covered calls

OTC options market makers, such as Orbit Markets, provide direct liquidity to institutional clients, therefore they act as counterparties, taking the other side of client trades and managing the resulting risk through hedging, offsetting positions and portfolio limits. They decompose risks into “Greeks” and use a combination of options, spot, futures and perpetuals to manage exposure. For exotic structures or less liquid tokens, hedging is more difficult, making pricing and risk management expertise important competitive advantages.

Main products:

Altcoin options. Listed venues offer limited altcoin coverage and often lack sufficient liquidity, making OTC the primary channel for many altcoin options. Foundations, for example, may sell covered calls to generate yield on token holdings.
Exotic options. Hedge funds seek sophisticated instruments familiar from traditional markets, including barrier options, lookback options, volatility swaps and multi-underlying payoffs.
Structured products. OTC dealers offer structures adapted from traditional finance to meet different needs of crypto investors:
- Accumulators: Enable gradual accumulation of BTC or other tokens at a predetermined price which is below the initial spot price. They are used by digital asset treasury (DAT) companies and investors building positions.
- Decumulators: Enable gradual token sales at a predetermined price which is above the initial spot price. They are used by miners and investors seeking to sell production or exit large positions.
- Fixed coupon notes (FCNs): Pay a fixed coupon in exchange for downside exposure below a preset level. They appeal to treasury managers and wealth clients seeking yield.

5. Emerging Segments

5.1 Prediction Markets

Prediction markets such as Kalshi and Polymarket list crypto event contracts, for example “Will BTC price be above $80,000 at 5pm on Friday?” or “Will Bitcoin reach $200k by next year?” Each contract pays a fixed amount, typically $1, if the outcome occurs and nothing otherwise. Its price, between $0 and $1, reflects the market’s implied probability.

These are exotic options in a new wrapper:

Binary option: pays a fixed amount if the underlying is above (or below) a strike at expiry.
One-touch option: pays a fixed amount if the underlying reaches a barrier level at any time before expiry.

Both are widely used by hedge funds in traditional markets, where they usually trade OTC with large banks. Prediction markets have packaged them in a simple format that retail users can access.

Polymarket was the first mover, but Kalshi overtook it in May 2026. Kalshi’s monthly crypto volume rose from $0.34 bn in January to $8.89 bn in September, while Polymarket’s fell from a peak of $2.9 bn in March to $0.77 bn. By September, Kalshi held 92% of the combined total.

Figure 2: Monthly crypto event contract volume, 2026 ($ bn)

Sources: Kalshi, Polymarket, ticker-tracker.com, defirate.com.

By traded notional, Kalshi is smaller than Deribit. However, notional volumes are not directly comparable, because binary options have very different payoffs from vanilla options. Premium paid may be a fairer measure.

In September, premium paid totalled $4.39 bn on Kalshi against $1.67 bn on Deribit. The average premium was 49% of notional on Kalshi and about 2.1% on Deribit. The gap reflects Kalshi’s flow mix: most of it comes from 15-minute up/down contracts, which by nature are priced close to 50%. Measured by premium paid, Kalshi was by far the largest crypto options venue.

If this growth continues, prediction markets could become a meaningful source of liquidity and price discovery for crypto options. Many crypto exchanges, including Coinbase, OKX, Bybit and Binance, have also launched or plan to launch crypto binaries of their own.

5.2 DeFi Options

Early innovation in DeFi options was driven by DeFi options vaults (DOVs), which automated option-selling strategies to generate yield for depositors. The sector expanded rapidly, with more than 30 protocols operating at its peak. However, most struggled to sustain demand and deliver attractive risk-adjusted returns, leading to significant consolidation. Only a handful of viable players remain.

Derive (formerly Lyra) is now one of the leading remaining protocols, recording average daily volume of approximately $80 million in Q3 2026 and a record $3.82 billion in monthly volume in September 2026.

Hyperliquid’s success in delivering a trading experience and liquidity comparable to centralised exchanges has renewed interest in on-chain derivatives. Its model could spur a new wave of DeFi options development by combining on-chain settlement and transparency with a more familiar trading experience. However, sustained growth will depend not only on execution quality, but also on whether options can establish compelling use cases and gain broader adoption within DeFi.

5.3 RWA / Tokenisation

The boundary between crypto and traditional financial markets is gradually blurring. Traditional venues provide crypto exposure through products such as IBIT, while crypto exchanges are expanding into traditional assets, including equities and commodities.

RWA perpetuals are already available across centralised exchanges (CEXs), including Binance, Kraken and Bybit, as well as decentralised exchanges (DEXs) such as Hyperliquid.
RWA options remain nascent, with a small number of exchanges recently introducing options on tokenised equities and gold.

Whether these products can achieve meaningful adoption remains uncertain. Traditional stock options are already readily accessible through established brokers and banks, supported by mature market infrastructure. For users who can access these channels, trading tokenised alternatives on crypto platforms may offer limited benefits.

The main use cases currently appear to centre on users who face practical barriers to opening traditional brokerage accounts or converting crypto to fiat. For these participants, crypto platforms offer an alternative route to gaining exposure to traditional assets, even if pricing and transaction costs are significantly higher.

More broadly, tokenisation does not automatically replace existing financial infrastructure or eliminate its inefficiencies. In many current implementations, it adds extra layers on top of the existing system, potentially introducing additional intermediaries, costs and operational friction rather than removing them.

As a result, tokenisation and RWA remain in an uncertain position: they may serve specific user segments and access needs, but their ability to compete with traditional options markets on cost, liquidity and convenience—and ultimately achieve mass adoption—remains unproven.