Institutional activity boosted BTC derivative trading in H1 2025, CoinGlass report

The first half of 2025 saw capital inflows shift heavily to BTC. Most of the price action hinged on the derivative market, where institutions moved in, tempering the influence of crypto-native traders. 

Bitcoin dominated the first half of 2025, with a new all-time high above $112,000. Based on research by Coinglass, over 80% of the trading volume and price discovery came from the derivative market, with a shrinking share of spot deals. 

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.

Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot