IBIT Options See Record Volume and Premiums Amid ETF Crash; Hedge Fund Blame Theory Emerges

BlackRock's iShares Bitcoin Spot ETF (IBIT) options experienced record activity as the ETF plunged 13% to its lowest level since October 2024. On February 6, options volume hit 2.33 million contracts, with puts outpacing calls and $900 million in premiums collected, the highest single-day total ever. Activity spiked after the fund faced margin calls from leveraged out-of-the-money calls, potentially leading to large sales and a record $10 billion in spot trading volume. Analysts debate whether the chaos stemmed from a hedge fund blowup or broad panic. Monarq Asset Management's Shreyas Chari attributed systematic selling and margin-related pressure to the ETF's high crypto exposure, while Pelion Capital's Tony Stewart noted significant buy-ins in put options and stressed that OTC transactions could also contribute. The episode underscores the growing influence of IBIT options, now a critical barometer of institutional sentiment and risk management.