Adjust the instant pot to the sauté setting and add the coconut oil.
After the oil has liquefied, mix in the kernels and stir until they are covered in the oil.
Stir the kernels until they begin to pop, then cover with a lid and continue popping until the sound ceases.
After turning off the instant pot, take out the popcorn and separate the unpopped kernels by sifting. Keep the popcorn aside.
Place sugar and 3 teaspoons of water in a saucepan over medium heat. Refrain from stirring and let the sugar dissolve.
After the sugar turns light brown, melt the butter and stir in the milk gradually. Cook for 5 minutes before removing from heat. Allow the caramel to cool until it thickens.
After the caramel has thickened, cover the popcorn with half of it and mix until the popcorn is completely coated. Refrigerate the popcorn for an hour.
Coat the popcorn with the leftover caramel and put it back in the refrigerator until it's time to serve.
Notes
Different Oil: If you don't want to use coconut oil for whatever reason, you can use another type of oil such as vegetable or olive, but keep in mind it may alter the flavor of your popcorn slightly.
Cooking Spray: To prevent sticking, spray your mixing spoon with cooking spray when adding the caramel. This will prevent the caramel from sticking to the spoon and will create a smooth stirring process.