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Unchained and analyst Checkmate highlight how iShares Bitcoin Trust leveraged ETF options have reshaped flows and bitcoin’s volatility profile.
Updated Sep 29, 2025, 11:42 a.m. Published Sep 29, 2025, 11:42 a.m.
Analyst James Check and Unchained produced a report on the current bitcoin BTC$112,173.86 market landscape, with the most interesting takeaway being the rise of the bitcoin exchange-traded funds (ETFs) specifically the success of iShares Bitcoin Trust (IBIT) and the options market that now underpins the product.
The report opens with a quote saying: "Options are now the dominant derivatives instrument by open interest, being over $90 Billion in size, and eclipsing the futures markets at $80 Billion".
Since its launch in January 2024, IBIT has seen around $61 billion in net inflows over 18 months, making it one of the most successful ETF's of all-time.
However, the dominance accelerated following the launch of ETF options in November 2024.
The options market, which gives investors the right but not the obligation to buy or sell an asset at a set price within a certain timeframe, has dramatically reshaped flows, with IBIT attracting $32.8 billion in inflows while competitors have remained flat since the options began trading.
The report states that IBIT now controls 57.5% of all bitcoin ETF assets under management (AUM), up from 49% in October 2024, with roughly 40 cents of options open interest for every dollar of bitcoin held in the fund. By contrast, Fidelity’s FBTC, the second largest ETF, is about 25 times smaller than IBIT in options open interest, with around $1.3 billion.
This level of activity has made IBIT a rival to Deribit, the world’s largest crypto options exchanges, where daily trading volumes typically run between $4 billion and $5 billion, according to the report.
The report also points to 13F filings, the quarterly disclosures required by the SEC for investment managers with over $100 million in assets. These filings show institutions holding ETFs, allowing others to use the options market to be able to short or use arbitrage methods for hedging volatility.
Overall, the report concludes that bitcoin’s volatility profile has shifted meaningfully in this cycle, with ETFs and their options markets serving as a major driver of that change.
"In our view, the launch of options on top of the spot ETFs is thus far an under-discussed, but highly important change in Bitcoin’s recent market structure", the report said.
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Crypto Markets Today: Warning Signals as Bitcoin's Strongest Month of the Year Approaches
October is the month in which bitcoin, on average, posts its best returns.
What to know:
Bitcoin (BTC) is rising as the start of October, historically its best month of the year, approaches. Ether (ETH) is also in the green over the past 24 hours, as are the other 18 members of the CoinDesk 20 Index, which has gained 3.0%.
Still, there are reasons to be wary. In the derivatives market, futures are showing a shift away from a bullish stance while options are sending out mixed messages.
Exchange-traded funds are leaking, with both spot bitcoin ETFs and ether ETFs in the U.S. notching net outflows on Friday. For the ETH ETFs, that's a fifth straight day of withdrawals, the longest streak since Sept. 8.
Another warning sign is the CME futures gap — the difference the between bitcoin's price when the CME futures market closes on Friday and when it reopens on Sunday — which is below the current levels. Futures gaps tend to be filled.
Derivatives Positioning
by Jacob Joseph
- Overall BTC futures open interest has dropped to roughly $29 billion from a recent high of $32 billion, indicating that traders are reducing their exposure.
- At the same time, the three-month annualized basis remains compressed at around 6%, making the basis trade less profitable.
- In essence, the market is showing a clear shift from a bullish bias as traders unwind their long positions and a growing number of shorts enter the market.
- In options, the BTC Implied Volatility Term Structure shows an upward-sloping curve while the 25 delta skew for short-term options (1-week, 1-month) has increased, suggesting that some traders are paying a premium for calls over puts, indicating a bullish bias.
- This is directly contradicted by the 24-hour put-call volume, which shows puts dominating with 58.43% of contracts traded, a sign that a large number of traders are still seeking downside protection.
- The divergence suggests a highly polarized market where some are betting on a short-term rally while others are actively hedging against further declines, leading to a state of indecision and mixed sentiment.
- BTC funding rates have recently turned negative, suggesting a growing bearish sentiment. After holding steady for most of the week, the annualized funding rate on Hyperliquid dropped significantly to a negative -6%. This indicates a strong conviction from traders who are shorting BTC on that platform.
- Meanwhile, funding rates on major venues like Binance and OKX remain near neutral. The overall trend, particularly the sharp drop on Hyperliquid, suggests that traders are actively taking risk off the table and positioning for a decline in BTC prices.
- Coinglass data shows $350 million in 24 hour liquidations, with a 24-76 split between longs and shorts. ETH ($130 million), BTC ($52 million) and SOL ($37 million) were the leaders in terms of notional liquidations. Binance's liquidation heatmap indicates $113,000 as a core liquidation level to monitor, in case of a price rise.
Token Talk
By Oliver Knight
- Plasma’s native token, XPL, is beginning to cool off following its red-hot trading debut. The Tether-backed token is changing hands at $1.29, down 12% over the past 24 hours, as daily trading volume slipped 9% to $2.3 billion.
- On-chain activity, however, tells a different story, with deposits rising 13.7% to $5.5 billion in the same period. Much of that capital is flowing into yield-generating products like Plasma Saving Vaults, which currently offer around 20% annualized returns on lending vaults.
- The combination of attractive yields and rapid inflows has helped Plasma quickly climb the blockchain rankings, already overtaking Coinbase-backed Base in terms of total value locked, according to data from DeFiLlama.
- While trading activity for XPL has cooled, inflows suggest strong investor appetite during a relative lull in the wider crypto markets as assets like BTC and ETH fell back to respective levels of support at the tail end of last week.
- It remains to be seen how well Plasma and its protocols fare during a bullish market phase, but the stablecoin-focused blockchain has already earned its fruits when the market is under pressure.
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