Derivatives, the backbone of a maturing sector
It's no surprise, but crypto derivatives remain tiny compared with their traditional equivalents.
At the end of June 2024, the Bank for International Settlements counted more than $700 trillion in notional outstandings for interest rate and foreign exchange derivatives. By way of comparison, crypto derivatives generated "only" $7,360 billion in traded volumes in August 2025.
The gap remains staggering (almost 1 to 100!).
But put back into their own ecosystem, derivatives already play a central role. They now account for around two-thirds of the volumes traded in crypto, a proportion comparable to that seen in traditional finance. This shift from spot to perpetual or forward contracts is not insignificant: it reflects the maturation of the market and the rise of instruments that facilitate price discovery, increase liquidity and offer players the opportunity to hedge against volatility.
It is also through derivatives that the gradual institutionalisation of the sector is taking place. From miners who lock in their future revenues to hedge funds that arbitrate the markets, via long-term investors anxious to manage their exposure, these tools have become indispensable. They provide more robust price references and serve as the foundation for the creation of more complex financial products, starting with ETFs.
Until now, the vast majority of these volumes have been concentrated on offshore platforms, inaccessible to institutional investors for compliance reasons. This limitation is now easing. In both the United States and Europe, the first regulated perpetual contracts are now being offered by authorised players such as Coinbase, Kraken and One Trading. These initiatives are finally paving the way for wider participation by professionals, who are able to integrate these instruments into diversified portfolios under a recognised regulatory framework.
While the crypto derivatives market remains a "dwarf" on a global scale, its internal role and structuring momentum make it a key pillar of the ecosystem.
Important news
Coinbase buys Deribit
Coinbase announced in May that it had acquired Deribit, the world leader in crypto options, for around $2.9 billion. This acquisition will enable the US exchange to offer a complete range of products (spot, futures, perpetuals and options) on a single platform, a key argument for attracting institutional investors. With $1,200 billion worth of BTC and ETH options traded in 2024, Deribit brings Coinbase technical expertise and a sophisticated customer base, ranging from funds to high-frequency traders. In addition to diversifying revenues, this integration strengthens Coinbase Prime and consolidates the group's position, while taking advantage of a derivative segment that is more remunerative than spot.
Hyperliquid makes progress on-chain
On the DEX side, Hyperliquid broke a record in August with $106 million in revenues and almost $400 billion in volumes on perpetuals. This trend confirms the rise of decentralised derivatives, with on-chain execution and native transparency on collateral and risk, with the project reaching 5.31% market share in crypto trading volumes, illustrating innovation and competition in the sector.
Kraken accelerates into the perps market
After acquiring NinjaTrader for $1.5 billion, Kraken enhanced its offering in September 2025 with the launch of perpetual contracts, now accessible via its consumer app in selected jurisdictions, including Europe. This step marks an important development for the US exchange in a core segment of crypto trading, aiming to capture a growing market share and strengthen its positioning in derivatives, as Kraken prepares for a possible IPO in early 2026.
CBOE and "continuous futures"
Chicago's CBOE is preparing for the arrival of "continuous futures" contracts on bitcoin and ether, with launch scheduled for November 10. These products are based on perpetuals, but adapted to US rules, with 10-year contracts and daily adjustments cleared by the CBOE chamber. The aim is to capture some of the activity that currently feeds Binance or OKX and to offer institutional and retail investors a regulated alternative.
Singapore Exchange launches bitcoin perps
The Singapore Exchange plans to introduce bitcoin perpetual futures in the second half of 2025, reserved for institutional and professional investors. The move is part of a global trend where traditional exchanges are looking to capture demand for regulated alternatives to offshore platforms such as Binance or OKX, boosting confidence and attracting more institutional capital to the crypto derivatives market.
Derivatives already at the heart of the crypto sector
A market that is still marginal when compared to its TradFi
Crypto derivatives remain very small when compared to the colossal mass of traditional finance. At the end of June 2024, the Bank for International Settlements (BIS) counted $579,000 billion in notional outstandings for interest rate derivatives and $130,000 billion for foreign exchange derivatives. By contrast, crypto derivatives generated a monthly volume of $7,360 billion in August 2025, a ratio of one to 100. Even if the metrics are not directly comparable (notional outstandings for TradFi, traded volumes for crypto), the order of magnitude is indisputable: crypto derivatives remain a niche in the face of the global financial system.
75% of crypto platform volumes are derivatives
Within the ecosystem, the dynamic is very different. For several years, derivatives have overtaken spot and now account for around 75% of volumes traded. In August 2025, combined spot and derivatives volumes on centralised platforms reached $9,720 billion; derivatives alone accounted for $7,360 billion. This proportion reflects the same logic as in TradFi: institutional investors and sophisticated traders alike favour these instruments to hedge, speculate or arbitrate. Derivatives have also become essential: spot/futures ratios show that it is now perps that dictate the trend in bitcoin and ether.
The decisive role of derivatives in structuring the crypto sector
- In any financial market, the liquidity and depth of derivatives make it possible to establish a more robust reference price. For bitcoin or ether, the existence of liquid derivatives markets limits the risks of manipulation on the spot market and gives institutional investors greater confidence in quotes. It is also a prerequisite for the creation of structured products (ETFs, ETNs), which require solid references.
- Derivatives attract a variety of trader profiles (institutional, hedge funds, arbitrageurs), as well as sophisticated retail. This diversity feeds order books, boosts liquidity and reduces spreads, which benefits the whole market, including the spot market. We have seen this with record volumes: during periods of volatility, it is the perpetuals that concentrate up to 30 billion dollars of daily volumes, compared with just a few billion on the spot market.
- Derivatives offer the possibility of protecting against volatility, which is inherent in cryptos. Bitcoin miners can hedge the future value of their production, long-term investors can protect themselves against sharp corrections, and market makers adjust their exposures. In a sector where fluctuations often exceed 10% in a single day, this function is indispensable.
- The rise of regulated derivatives opens up the market to institutional players who could not turn to offshore platforms such as Binance or OKX. This increases the investor base, facilitates the integration of cryptos into diversified portfolios and brings this market closer to TradFi standards
The main players
Binance crushes the competition from its offshore platform
The perpetual contracts market remains concentrated around a trio of platforms: Binance, Bybit and OKX, which between them capture almost 70% of bitcoin open interest. Their dominance is due as much to the depth of their books as to their ability to offer a wide range of assets and competitive trading conditions.
Behind this podium, a second line of players (Kraken, Gate.io, Bitget, XT.com, Gemini, KuCoin, BingX) are nibbling away at market share, often by banking on a differentiated strategy: compliance for Kraken, a proliferation of exotic pairs for Gate.io, an aggressive incentive policy for Bitget, regional roots for KuCoin or BingX, etc.
While their weight remains limited compared to the leaders, these platforms are helping to fragment the offering and spread perps to a wider audience. They also bear witness to a reality: innovation and competition are mainly played out offshore, far from the strictest jurisdictions, which partly explains why regulated markets are still struggling to compete in terms of volume.
A large majority of these platforms are not accessible to US and European users for regulatory reasons.
Regulatory clarification underway
Europe and the US have their first regulated players
In the US, perpetual contracts are moving from the shadows into the light. Since 21 July 2025, Coinbase has been offering fully regulated, CFTC-compliant perps on BTC and ETH, with up to 10x leverage and a long-dated contract model. This is a direct response to traders previously confined to offshore platforms. Kraken has also been offering derivatives products in the US since July, thanks to the acquisition of regulated platform NinjaTrader.
In Europe, the trajectory is slower and more demanding: derivatives, including perps, fall under MiFID II when they are offered to EU clients, implying heavy standards of transparency, licensing and supervision. To date, only One Trading, OKX and Kraken offer perps to European investors through a combination of MiFID II and MiCA licences.
But the landscape could soon expand: Bitstamp is preparing an offering of regulated perpetuals in Europe based on its MiFID II licence, as are Coinbase, Gemini and Crypto.com.
Hyperliquid, a solid onchain alternative?
For the 1st time, a DEX Perp competes with the big traditional platforms
Since its launch, Hyperliquid has established itself as one of the most scrutinised DeFi projects of the moment. Built around a decentralised infrastructure, it has managed to capture a significant share of the crypto derivatives market (5%), until now dominated by large centralised platforms (CEX) such as Binance, Bybit or OKX.
The protocol is based on a fully onchain order book, with fast execution and low costs, bringing it close to the experience offered by traditional platforms. In just a few months, it has established itself as a major player in the trading of perpetual contracts, to the point where it is now considered a credible player for traders who are new to the sector. Its strategy is also based on a strong alignment of incentives: the revenue generated fuels redemptions of its HYPE token, and the team has stepped up community initiatives, starting with large-scale distributions to early adopters.
Beyond trading, Hyperliquid is looking to broaden its scope. The launch of USDH, its native stablecoin, is part of a drive to diversify and consolidate the ecosystem. The idea is to capture some of the revenue from reserves, currently monopolised by centralised issuers such as Circle. But the governance around this project has already sparked debate, with some criticising the process for being too closed.
The fact remains that institutional adoption of Hyperliquid seems, at this stage, difficult to envisage. The protocol operates without any real KYC procedure and does not fall within any established regulatory framework. Institutional investors cannot afford to deal with infrastructures that do not meet compliance and risk management standards. The launch of a stablecoin further accentuates this problem, since regulators are now demanding solid evidence in terms of reserves, audits and transparency.
A project that nevertheless remains to be followed very closely.
Perp DEX vs CEX: two different architectures
Security
Regulated CEXs are supposed to protect their users. In practice, however, there are a number of shortcomings: regulators have called them to order, FTX has gone bankrupt, and Bybit was recently hacked. Perp DEX reduce some of this risk, as users retain custody of their funds and can withdraw them at any time. Activity and deposits are also verifiable in real time. On the other hand, the main risk is that of a vulnerability in the protocol code. Some CEXs nevertheless offer external custody solutions via Copper, Ceffu or Fireblocks, reserved for a minority of institutional users. In practice, CEX security is based on the law, whereas DEX perp security is based on code.
Reliability and performance
The most established CEXs offer great technical robustness: few interruptions and the ability to absorb large volumes with low latency. Conversely, perp DEXs have long suffered from the technical limitations of blockchains. Networks saturated quickly, transactions were slow and users were vulnerable to MEV (maximum extractable value) attacks. To overcome these constraints, perp DEX were installed on layer 2s with a single sequencer, or on blockchains operated by a small number of co-located validators. This is the case with Hyperliquid, whose validators are based in Tokyo, close to Binance's servers, making arbitrage easier for market makers.
Liquidity
Liquidity remains a central issue. Platforms need to reduce spreads and have sufficient volumes to absorb orders. Market makers play a key role here: by placing buy and sell orders simultaneously, they ensure market depth while capturing the price spread. A platform must attract both market makers and users. This virtuous circle tends to concentrate activity on a few dominant players, with Binance becoming the main place where prices are formed. To attract market makers, CEX and perp DEX offer discounts, sometimes even negative fees. Hyperliquid goes further by prioritising the cancellation of maker orders over taker orders in order to limit exposure to so-called toxic orders. In addition, some perp DEX now deploy vaults that act as market makers, offering depositors a return while improving liquidity. These strategies nonetheless entail risks of loss.
Specific advantages of perp DEX
Perp DEX operate in an uncertain regulatory framework that allows them to operate where perps are prohibited to retail investors, often without KYC procedures. Listing new tokens is also quicker, with no prior audit. But this situation could change with the tightening of controls, particularly on interfaces, which remain centralised. They also benefit from strong interoperability with DeFi. Integrated directly into wallets, aggregators or lending protocols, they extend their reach without having to develop these additional services themselves. Hyperliquid illustrates this logic: its protocol is integrated into Phantom, Rabby and Infinex, which offer perps trading directly in their applications. The platforms benefit from pooled liquidity, while the applications monetise their user base.
The Big Whale's analysis
Regulated platforms face many challenges from their offshore competitors and decentralised platforms
Derivatives have become the backbone of the crypto market. They account for nearly three-quarters of the volumes traded each month, a weight that confirms their central role in liquidity and price formation. But behind this dominance lies a paradox: the majority of these volumes are still concentrated on platforms operating outside the major regulatory frameworks.
Binance illustrates this reality. The global giant remains by far the biggest player in derivatives, accounting for more than a third of volumes. But the availability of its derivatives still relies on offshore jurisdictions and a model that does not offer the guarantees of transparency or compliance demanded by institutional investors. This status quo explains why, despite its weight, Binance remains on the sidelines of the major flows coming from traditional finance.
At the same time, the situation is changing in the United States and Europe. The adoption of clear frameworks (by the CFTC in the US, MiFID II in Europe) has enabled regulated players such as Coinbase and Kraken to launch their own derivatives offerings. Their objective is clear: to capture an institutional clientele that will only enter this market with authorised counterparties, subject to the same rules as traditional exchanges. These initiatives are still in their infancy, but they point the way to the gradual integration of crypto derivatives into institutional portfolios.
Another player is shaking up the landscape: Hyperliquid. This fast-growing decentralised protocol now accounts for a growing share of volumes (5%), to the point where it is emerging as a credible competitor to centralised exchanges. Its model, with no KYC and based on community governance, appeals to many traders looking for market depth and flexible conditions.
But it also has its limitations: without identity verification and regulatory oversight, Hyperliquid remains incompatible with institutional standards. Nonetheless, its innovation, growth and ability to federate an active community make it a project to watch closely.
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