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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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Crypto World

Altura Launches Onchain Gold Arbitrage Vault for Retail Users

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Altura Launches Onchain Gold Arbitrage Vault for Retail Users

Altura, a decentralized finance protocol founded by former Fidelity and PwC staff is launching an onchain gold arbitrage strategy aimed at retail investors, targeting 20% annualized returns, according to a Thursday release shared with Cointelegraph.

According to Altura, the product pools user deposits into a vault that recycles capital through short-duration physical gold trades. Unlike platforms like Robinhood or Revolut that offer passive gold price exposure, Altura claims to be tokenizing the underlying arbitrage process itself.

The company says it has raised $4 million in funding and has already facilitated the movement of about 185 kilograms of gold, representing roughly $28.5 million in cumulative transaction volume, per the release. 

Matthew Pinnock, co-founder and chief operating officer of Altura, told Cointelegraph the goal is to “bring an institutional-style gold strategy onchain in a way that retail investors can actually access.”

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The launch comes as spot gold trades near record levels after surging to an all-time high above $5,300 an ounce in January, though it has since pulled back sharply. Altura’s launch points to a new phase in tokenized real-world assets, where projects are no longer just offering passive exposure to commodities but are trying to package institutional trading strategies as onchain DeFi yield products for retail users.

A strategy typically reserved for institutional traders

Pinnock said Altura’s “revenue-generating trading strategy” was historically used by institutional commodities desks, and that high capital requirements, legal complexity and counterparty risk in traditional bullion arbitrage have effectively kept smaller investors out of this type of trade.

Gold price over the last 12 months. Source: Trading Economics

Gold purchased on behalf of Altura by its trading partner Inessa is tokenized at acquisition, Pinnock said, with those tokens escrowed through each trade and custody transitions recorded via dual cryptographic signatures. Depositors do not hold direct title to bullion but gain exposure to returns generated by the trade flow, he added.

Altura’s setup depends on a network of offchain actors. The company says it is working with Aurellion Labs and Inessa, which in turn partners with air-cargo specialist Zeal Global, to execute and verify trades.

Related: Gold hits record high over $5K, further diverging from Bitcoin

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On the targeted 20% yields, Pinnock said the strategy is structured to be “close to delta-neutral,” with trade terms agreed before logistics execution begins so that returns come from price discrepancies between counterparties rather than directional bets on the gold price.

Each arbitrage cycle typically completes within one to two days, allowing capital to be recycled multiple times and limiting exposure to spot moves, he said, while acknowledging that yields would compress if pricing inefficiencies narrow.

Related: Tokenized gold drives weekend price signals while CME futures are closed

Rising interest in real-world yields

The launch comes amid rising interest in “real-world” DeFi yields, as tokenized asset and RWA protocols grew to roughly $17 billion in total value locked in December 2025, according to DefiLlama data.

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However, a joint report by RWA.io and Veritas Protocol in that same month found that losses from onchain operational failures in tokenized RWA markets rose to $14.6 million in the first half of 2025, a 143% increase from the previous year, highlighting how complex offchain structures can still translate into user losses.

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