Wall Street Goes Crypto: Institutional Frenzy Drives BTC Derivatives to Record H1 2025 Volumes

Bitcoin derivatives just got a trillion-dollar steroid shot—and the suits are finally to blame.

Institutional players piled into BTC futures and options like never before in the first half of 2025, according to CoinGlass data. The numbers don't lie: traditional finance's late arrival to crypto's party just kicked the door off its hinges.

Why the sudden FOMO? Three words: regulated cash cows. With CME's Bitcoin products now trading like blue-chip stocks and BlackRock's ETF sucking up liquidity, hedge funds found their perfect casino—one where the house always wins (and charges 2-and-20 for the privilege).

But here's the kicker: while Wall Street plays with leveraged paper Bitcoin, the OGs keep stacking real satoshis. Some things never change—least of all finance's genius for turning disruption into just another revenue stream.

Open interest on derivative exchanges kept expanding in H1, rising from around $60B in January to over $70B six months later. BTC open interest inched up in July, reaching $34B on crypto-native exchanges. Long and short positions were more balanced, avoiding a short squeeze.

Institutions decreased BTC volatility

For the whole of H1, institutions moved in with more active derivative trading. This boosted the share of CME futures, expanding beyond the activity on Binance. As a result, BTC volatility continued to slow down, gradually sliding to a six-month low of 1.27%. 

CME carried over $16.5B open interest, surpassing the $11.3B in open interest on Binance. Institutions on CME joined ETF buyers, expanding the effect of institutions on the bitcoin market. The increased liquidity inflows helped lower the BTC volatility, as the leading crypto asset consolidated at a higher level. 

Binance remained the biggest crypto-native exchange by open interest, though its share was diluted. For the first half of 2025, the biggest liquidation events happened during the corrections in February and March-April. Outside those two episodes, traders were more cautious in allocating liquidity to BTC positions. 

As a result, BTC went through relatively smaller liquidation episodes, with more rational allocation and smaller daily liquidations. 

Crypto derivatives index recovered in Q2

The Coinglass crypto Derivatives index staged a recovery in the second quarter of 2025. The index tracks the performance of derivative markets for BTC, ETH, SOL, and XRP, applying value-based weighting on their open interest. 

As of July 2025, the index is at $2,231.02, up from the $1,600 range during the yearly lows in April. The index’s drop in the first half of the year was mostly due to the weak performance of ethereum (ETH). 

Capital inflows in the first half of 2025 were still heavily concentrated on BTC, boosting the index despite the slowdown of other assets. However, the fall of ETH, SOL and XRP reflected the general weakness of altcoins, pulling the index lower despite the strength of BTC. 

According to the Coinglass analysis, the index had a boost driven by ETF demand and the usage of Bitcoin as a SAFE haven, while profit-taking and uncertainty put pressure on secondary assets and the broader altcoin market. 

The altcoin market expected in the first quarter of 2025 never materialized, instead pushing smaller assets even lower. The altcoin season index recovered to 28 points in July, still reflecting the overall BTC dominance. 

By the first half of 2025, the divergence of BTC and altcoins was at near-record levels. Based on market signals, altcoins are seen as extremely undervalued. Despite the low levels, traders have become more skeptical that older altcoins WOULD make a return.

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