The cryptocurrency derivatives market handled $86 trillion in 2025 — exposure to unknown risks is increasing

The year 2025 brought record-breaking volumes in the cryptocurrency derivatives segment, reaching a total value of $86 trillion. The average daily trading volume of around $265 billion confirms that financial derivatives have become a key mechanism for price formation in the market. This transformation reflects a fundamental change in market structure — a shift from dominance by retail investors and high leverage to an ecosystem driven by institutional capital, hedging strategies, and ETF-related flows.

Market Institutionalization Changes Trading Methods

The influx of institutional capital, resulting from the approval of spot ETFs, has permanently altered the market landscape. The major trading platforms increased their share of the global volume — the four largest exchanges handled approximately 62.3% of all derivatives trading. This concentration indicates decreasing market fragmentation and the growing importance of professional operators.

At the same time, institutions have shown a preference for regulated trading channels, symbolizing sector maturity. The derivatives market is no longer the domain of retail players — it is now dominated by professional trading strategies, underlying arbitrage operations, and large-scale risk management.

Stress Tests Unveiled System Fragility

However, 2025 also brought significant challenges. It is estimated that total forced liquidations amounted to $150 billion, indicating increasing systemic risk. The derivatives market is beginning to operate like a connected system of vessels — individual shocks can cause cascading effects.

The October deleveraging event, triggered by trade policy announcements, led to liquidations worth over $19 billion within just 48 hours. This incident revealed how sensitive the market has become to macroeconomic shocks and how quickly leverage chains can spread across platforms.

Maturity Brings New Risks

The derivatives market is evolving faster than risk oversight mechanisms. Margin deposit conditions, liquidation procedures, and risk transmission pathways between platforms have become significantly strained. Deep leverage chains, characteristic of modern derivatives trading, create hidden links between seemingly independent market operators.

The structure of the derivatives market is no longer an isolated island — it is part of a larger ecosystem, susceptible to external shocks and internal imperfections. The outlook for the coming year will largely depend on the industry’s ability to propose more robust risk management mechanisms.