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Crypto Derivatives Surge as Institutions Turn to Options to Hedge Massive Bitcoin Positions

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Here’s How US Funding Certainty Calmed Markets and Lifted Bitcoin


DeFi platforms like Hyperliquid are demonstrating that decentralized exchanges can rival centralized venues in execution speed and transparency, according to Delphi Digital.

The cryptocurrency options market is expanding rapidly as institutional investors increasingly rely on instruments that allow them to define risk when managing large digital asset positions.

According to the crypto research firm Delphi Digital, trading activity in crypto derivatives has accelerated significantly. In fact, volumes on the Chicago Mercantile Exchange are currently running about 46% above the pace recorded during the exchange’s previous record year.

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Crypto Options Market Expands

Delphi Digital said this growth indicates rising institutional participation, as funds and asset managers prefer options contracts because they allow investors to hedge large exposures while limiting downside risk to the premium paid. The firm noted that the move toward defined-risk instruments became more evident in mid-2025, when aggregate open interest in Bitcoin options reached $65 billion and exceeded Bitcoin futures open interest for the first time.

While futures are commonly used to gain leveraged exposure, options allow traders to cap potential losses on large positions, such as a $500 million Bitcoin allocation, while maintaining upside exposure. Delphi Digital explained that most of the current options activity is concentrated on a small number of centralized venues. For several years, the primary platform for crypto options trading has been Deribit, which gained additional institutional backing after being acquired in 2025 by Coinbase in a deal valued at $2.9 billion.

At the same time, options linked to the spot Bitcoin exchange-traded fund issued by BlackRock under the ticker IBIT introduced a new source of activity from traditional financial market participants after launching in late 2024. In addition to the rapid growth of centralized platforms, Delphi Digital said decentralized derivatives markets have also expanded, as their market share increased from about 2% to more than 10% over the past two years.

The firm pointed to the success of the decentralized trading platform Hyperliquid in demonstrating that decentralized exchanges can achieve performance levels similar to centralized venues in terms of execution speed and transparency.

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However, it said that on-chain options trading has not yet experienced the same level of adoption. Among decentralized options platforms, Delphi Digital identified Derive as the largest protocol currently operating in the sector, which reported more than $700 million in notional options volume over the past 30 days. The platform originally launched as Lyra in 2021 and later rebuilt its infrastructure in 2023 using a gasless central limit order book on its own OP Stack layer-2 network, which allowed market makers to quote directly on the order book and enabled traders to execute transactions without paying gas fees.

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Another project developing similar capabilities is Kyan Exchange, which is currently operating in beta on the Arbitrum network and is preparing for a mainnet launch.

The research firm said demand for options is also tied to the growth of structured financial products used by asset managers, which rely on derivatives to generate yield while maintaining defined risk profiles. It pointed to income-focused strategies such as covered-call products used in traditional markets and noted that derivative income funds collectively manage more than $100 billion in assets.

Regulation Side of Things

Delphi Digital added that the regulatory environment surrounding crypto derivatives may also be beginning to change, citing a joint statement issued in September 2025 by the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) that enabled spot crypto asset trading on regulated exchanges.

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Meanwhile, the Clarity Act bill, which aims to create clear regulations that should help promote cryptocurrency adoption, has hit an impasse. But if the legislation ultimately moves forward, it would represent a significant milestone for the industry.

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Michael Saylor fires back former UK Prime Minister says Bitcoin is a ponzi scheme

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Saylor hints MicroStrategy’s BTC buys front‑run future supply squeezes

Michael Saylor has responded sharply after former UK Prime Minister Boris Johnson criticized Bitcoin (BTC) and suggested that it resembles a Ponzi scheme.

Former UK Prime Minister Boris Johnson criticizes Bitcoin

Johnson described a conversation with a church acquaintance who lost money after being lured into a supposed crypto investment opportunity. According to Johnson, the man initially handed over £500 to someone who promised to double his money through Bitcoin.

“After three and a half years of muddle… he was down £20,000,” Johnson wrote in a report. He also described how the individual paid repeated fees in an attempt to recover the funds. The former prime minister used the story to question the value and structure of cryptocurrencies.

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He contrasted BTC with traditional assets and collectibles.“I can see the intrinsic value of gold,” Johnson wrote. “I can even understand why Pokemon cards have kept their value.”

He then questioned the foundations of digital assets, arguing that Bitcoin lacks an identifiable authority or issuer. “But Bitcoin? What is it? It’s just a string of numbers stored in a series of computers,” he wrote.

Johnson also referenced the mysterious origins of the BTC’s creator, Satoshi Nakamoto, adding that the system depends heavily on collective belief. “The whole thing depends completely on the collective belief… of the Bitcoin holders,” Johnson said.

He warned that increasing cases of fraud linked to crypto investments could weaken confidence in the sector. “I have always suspected from the outset that all cryptocurrencies were basically a Ponzi scheme,” Johnson wrote. He argued that the ecosystem relies on a continuous flow of new investors.

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Michael Saylor claps back at Johnson

Saylor rejected that characterization in a post on the social platform X. “Bitcoin is not a Ponzi scheme,” Saylor wrote. “A Ponzi requires a central operator promising returns and paying early investors with funds from later ones.”

He argued that Bitcoin’s structure makes it fundamentally different from such schemes. “Bitcoin has no issuer, no promoter, and no guaranteed return—just an open, decentralized monetary network driven by code and market demand,” Saylor said.

The executive has long been one of the most prominent corporate advocates for Bitcoin. His company, MicroStrategy, holds billions of dollars worth of the crypto on its balance sheet. Johnson’s comments also revisited broader debates about monetary systems.

In his remarks, he referenced historical currency models backed by government authority, pointing to Roman coins bearing the image of emperors as an example of trust in state-backed money. Crypto supporters, however, often argue that Bitcoin’s decentralized structure is precisely what protects it from political influence and inflation tied to government spending.

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XRP Ledger activity is hitting records, but why are xrp prices down 62% from peak

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(CoinDesk)

The XRP Ledger has never been busier, but traders are yet to catch up.

Daily successful payments on XRPL recently hit a 12 month high of over 2.7 million, up from roughly 1 million in late 2025, according to XRPSCAN data. The network is processing between 2 and 2.8 million transactions per day at 20 to 26 transactions per second.

(CoinDesk)

Automated market maker pools have exploded to nearly 27,000 active pools supporting more than 16,000 unique tokens. Tokenized real-world asset value on the ledger climbed to $461 million, up 35% in the past 30 days, per RWA.xyz. Stablecoin transfer volume over the same period hit $1.19 billion.

XRP is trading at $1.37 and is down 26% year-to-date. It’s 62% below its late-2025 high of $3.65.

That gap between what the ledger is doing and what the token is doing is the most important thing happening in XRP right now, and it’s a question the market hasn’t answered yet.

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The standard crypto thesis is that network activity drives token value. More usage means more demand for the native asset, which pushes price higher. It’s the framework that worked for Ethereum during DeFi summer and for Solana during the meme coin boom.

But XRP is breaking the pattern. Every metric that should matter for a utility token is up, but the price is down.

The most likely explanation is structural. XRPL’s growing activity is increasingly driven by RLUSD, Ripple’s stablecoin, and tokenized assets that flow through XRP as a bridge currency but don’t create sustained demand for the token.

A payment that uses XRP for three seconds to settle a cross-border transaction between fiat currencies doesn’t generate the same kind of buy pressure as someone staking ETH for months or locking SOL in a DeFi protocol. The network gets busier, but the token stays liquid and transient. Activity goes up but scarcity doesn’t.

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The DeFi numbers make this stark. DeFiLlama shows XRPL’s total value locked at $47.54 million. That’s the entire DeFi ecosystem on a chain whose native token has an $84 billion market cap.

(DefiLlama)

For comparison, Solana carries roughly $4 billion in TVL. Ethereum has over $40 billion. XRP’s DeFi layer is a rounding error relative to its valuation, which means the market cap is still overwhelmingly driven by speculative positioning and ETF expectations rather than capital locked into productive on-chain activity.

The native DEX tells a similar story. Daily volume runs between $4 million and $8 million on recent data, modest for any Layer 1 and especially small for one ranked fifth by market cap.

The AMM pool growth is real, with 27,000 pools and 12 million XRP deposited, but the dollar value of that liquidity remains thin relative to the scale of the token’s market.

The RWA picture is the one area where the data genuinely supports the bull case. $461 million in distributed asset value and $1.5 billion in represented asset value puts XRPL ahead of several larger chains in specific tokenization categories.

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Stablecoin market cap on the ledger sits at $339 million with 35,800 holders. The 30-day RWA transfer volume of $149 million, up over 1,300%, suggests real institutional activity rather than wash trading. If the tokenization thesis plays out over the next few years, XRPL has a foothold that most competitors don’t.

As such, March historically averages an 18% return for XRP, and the $1.27 to $1.30 support zone has held through multiple tests. If macro conditions stabilize and the Iran conflict moves toward resolution, a relief bounce to $1.60 or higher is plausible.

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Ethereum Foundation Outlines Ethos and Responsibilities in New Mandate

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Ethereum

The Ethereum Foundation, the non-profit organization that stewards the development of the Ethereum ecosystem, published its mandate on Friday, reaffirming its role and the core pillars of Ethereum.

The Ethereum Foundation’s two stated goals are that Ethereum remains decentralized and that users have a “final say” over their onchain assets and data, while the protocol achieves mass scale, according to the mandate.

Censorship resistance, open source code, privacy, security, and freedom-preserving technology are the core properties of Ethereum that will be upheld, the mandate, the document said.

Ethereum
Source: Ethereum Foundation

The Ethereum Foundation said it will continue to focus on core protocol upgrades, “long-horizon research,” cybersecurity, and providing tooling for Ethereum’s developers, while minimizing its role as much as possible. The mandate said: 

“Our ultimate goal is for Ethereum to pass the walkaway test: its protocol and core application layers become robust and trustless enough that they would continue to reliably function and evolve even if the Foundation and today’s core developers disappeared tomorrow.”

The Ethereum Foundation said it aims to focus on tasks that become less necessary over time through a process of subtraction. 

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The mandate follows a challenging year for the protocol, with Ethereum co-founder Vitalik Buterin saying that Ethereum’s approach to scaling through layer-2 networks “no longer makes sense,” and that many L2s are centralized projects. 

Related: AI ‘vibe coding’ could put Ethereum roadmap ahead of schedule: Vitalik Buterin 

Buterin says a drastic change in how Ethereum scales is needed

Buteirn said that many layer-2 networks feature centralized points of control, including private trusted networks and centralized sequencers, and have no plans to transition to a fully decentralized model.

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“The original vision of L2s and their role in Ethereum no longer makes sense, and we need a new path,” Buterin said in February. 

Buterin argued that a layer-2 project that boasts a throughput of 10,000 transactions per second (TPS) but relies on a multi-signature bridge to interact with the layer-1 protocol is not scaling the Ethereum ecosystem in a decentralized way.

Instead of acting as scaling layers for Ethereum, the ecosystem’s many layer-2 networks should specialize in a niche such as privacy, identity solutions, finance platforms and social media applications, Buterin said, which drew mixed reactions from L2 projects.

Magazine: Ethereum’s roadmap to 10,000 TPS using ZK tech: Dummies’ guide

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