TLDR
- Coinbase acquired Deribit for $2.9B to expand its crypto derivatives reach.
- Over 75% of past crypto derivatives activity was concentrated in Asia.
- TradFi firms from the US and EU now seek risk-managed crypto exposure.
- $7B in liquidations occurred during a 12-minute crypto flash crash event.
Coinbase expects a major change in the global crypto derivatives market, as traditional finance (TradFi) institutions from the U.S. and Europe begin to adopt digital asset derivatives for risk-managed strategies. This shift may reduce Asia’s long-standing dominance in the space. With its $2.9 billion acquisition of Deribit, Coinbase is positioning itself to support this transition and meet the needs of professional asset managers.
Traditional Institutions to Shift the Derivatives Landscape
Coinbase’s head of global derivative sales, Usman Naeem, said that over 75% of crypto derivatives activity was once centered in Asia. However, that pattern is changing as U.S. and European institutions begin entering the market. These firms are not market makers but are instead asset managers and long-term investors.
Unlike previous players in crypto derivatives, these institutions are seeking more structured and risk-controlled approaches. Rather than chasing speculative gains, they prefer strategies such as hedging exposure and scaling investments. This transition is expected to bring a different kind of demand to the market, favoring stability and risk-managed growth.
From Speculation to Risk-Managed Strategies
Naeem explained that the interest from traditional finance is based on structured portfolio goals. For example, rather than expecting large price jumps, institutions may choose to sell potential gains to fund protective measures against losses. He said, “Rather than just speculating for a 50% rally in bitcoin, maybe they sell some upside to help fund insurance for the downside.”
This method is common in traditional equity and fixed income markets. Bringing this strategy into digital assets could lead to the creation of more balanced and understandable volatility products. This is likely to encourage more consistent liquidity and may support overall market development in a more stable way.
Market Infrastructure Proves Resilient in Recent Crash
Earlier in the month, a sharp price drop triggered about $7 billion in crypto derivatives liquidations. Some questioned whether such volatility would push institutions away. Naeem responded by noting that flash crashes happen in other markets as well, including traditional ones.
He emphasized that the infrastructure operated as expected, saying, “The liquidations were there; the waterfalls kicked in as designed.” He added that perpetual futures function differently than centrally cleared contracts and require tight risk controls. The event played out over roughly 12 minutes, during which automated systems managed the unwinding of leveraged positions.
Coinbase Positions Itself Through Deribit and FairX
Coinbase’s expansion into derivatives began with the purchase of FairX in 2022, a CFTC-regulated platform. That move allowed the exchange to offer U.S.-compliant futures products. In May 2025, it followed with the acquisition of Deribit, the largest crypto options exchange globally.
With these two platforms, Coinbase now offers both U.S.-regulated and offshore derivatives. This dual setup puts the company in a strong position to serve the growing demand from Western asset managers. The move also reflects Coinbase’s strategy to meet the evolving needs of global institutions that require compliance and robust trading infrastructure.
While Asia and regions like Dubai remain active in perpetual futures, Coinbase expects the rise of TradFi users to change both the volume and nature of crypto derivatives trading. This rebalancing may drive further development of tools that mirror those in traditional financial markets, but adapted for digital assets.
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