The Growing Crypto-TradFi Crossover

Martin Gaspar
Senior Crypto Market Strategist

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Bitcoin ETF volumes have climbed to roughly 50% of BTC spot volumes in recent weeks, a sign of how quickly the market's structure has shifted. Crypto trading, once dominated by spot exchanges, now runs through instruments long familiar to traditional finance: ETFs and a rapidly growing derivatives complex. That migration is bringing in new pools of capital while also importing the structural trends and trading dynamics of conventional markets.

For one, these TradFi vehicles are starting to have more of an impact, as seen during the largest crypto volume days in recent history. The selloff on October 10, 2025, was broad-based across cryptocurrencies, while the one on Feb 5, 2026, was largely in BTC. During the latter, IBIT volumes spiked to a record $10.7B, 53% above October 10 volumes, while spot BTC volumes in aggregate were below October levels. The dichotomy demonstrates crypto is now part of traditional plumbing and likely will be increasingly impacted by it.

Crypto derivatives are also exploding. This was especially seen on the IBIT options front, which decisively flipped Deribit BTC options in notional open interest in 2025. BTC options notional open interest (~~$70B) was more than double its futures open interest (~~$30B) as of mid February, highlighting the institutionalization of this asset class.

This broader shift could accelerate, as wealth platforms increasingly target crypto allocations. Platforms such as BlackRock, Morgan Stanley, and Bank of America are suggesting up to a 4% crypto allocation. There are signs this is already showing up in flows, with newer ETF launches such as SOL, XRP, and LINK all consistently seeing inflows, despite turbulent markets. It indicates wealth advisors may be implementing the suggested allocations now that they finally have the tools available to them and their clients. Moreover, flows suggest these products are successfully attracting sticky capital.

These trends coincide with a broader push in the finance space for platforms to be the “everything exchange”. Investors seem increasingly interested in having access to a full suite of asset classes or products at their fingertips. Crypto-native exchanges (Coinbase, Kraken, Binance) have moved into offering stock trading, while traditional brokerages move into crypto (Robinhood, Schwab, E-trade). This is playing out on-chain as well, with DEXes moving to offer markets on traditional instruments. Hyperliquid is a flagbearer in this regard, with its HIP-3 markets on equities and commodities reaching a record 20% of its total open interest as of early March. For the crypto industry, this means that the capital they are chasing may have a different profile than before.

Crypto will look very different in a few years. Investor profiles evolve along with new investment products that will have an impact on price action and activity. The more interesting question isn't whether crypto continues to institutionalize, but rather what ends up running through those pipes.

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