BlackRock’s iShares Bitcoin Trust (IBIT) marked a major milestone with the launch of the first U.S. spot Bitcoin ETF options on Tuesday, setting it apart from competitors, which began trading their own options on Wednesday.

The IBIT ETF, which boasts a market cap of $44 billion, experienced a surge in trading activity, with over $2 billion in notional value for its options within the first day. The ETF itself also saw over $4 billion in volume, ranking behind only the SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ), and iShares Russell 2000 ETF (IWM), which have much larger market caps, according to Coinglass data.

Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted the impressive debut of IBIT options but cautioned that it has not yet reached the scale of more established ETFs. He noted, “$1.9 billion on day one is unheard of, especially compared to BITO’s $363 million debut, which had been around for four years. However, given the 25,000 contract position limit, this isn’t quite at the level of the largest ETFs yet.”

The 25,000-contract limit imposed on IBIT and other Bitcoin ETF options is tighter than that of traditional financial products, aiming to prevent excessive market manipulation. Market participants can hold a maximum of 25,000 contracts at a given time, which has led to some industry critics raising concerns about the restrictions.

Jeff Park, head of Alpha Strategies at Bitwise, discussed the limitations, noting that the exercisable risk for IBIT options is just 0.5% of the ETF’s outstanding shares, significantly lower than the 7% typical for most ETFs. Park also speculated that the CME Group, which primarily focuses on Bitcoin futures, may prefer Bitcoin to remain as a futures product to maintain its dominance in the market.

Despite these regulatory constraints, Bitcoin’s price surged to new all-time highs above $94,000, indicating strong market demand. Furthermore, Glassnode data showed that Bitcoin options open interest reached $40 billion, though futures still dominate with $60 billion in open interest.

The growing appeal of Bitcoin ETFs and options is reflected in the net inflow of $816.4 million into U.S. spot Bitcoin ETFs, bringing the total net inflows to $28.5 billion, according to Farside data. As the Bitcoin ETF options market expands, both retail and institutional interest in Bitcoin-linked products is expected to continue rising.