The prolonged crypto winter has led to a dramatic shift in speculative trading activity, with derivatives traders abandoning volatile cryptocurrencies for leveraged bets on gold and silver. According to Coinglass data, total open interest across crypto derivatives has collapsed from over $90 billion at last year's peak to roughly $44 billion, reflecting classic bear market behavior where investors retreat to the sidelines as prices stagnate and volatility fades.
Binance's newly launched Gold and Silver perpetual futures contracts have attracted over $70 billion in trading volume in just weeks, offering traders 24/7 on-chain exposure to precious metals without leaving crypto rails. This massive rotation is confirmed by a sharp decline in Tether's USDT supply, which is on track for its largest monthly drop since the FTX collapse, indicating a tightening of crypto liquidity as capital flows into metals for hedging purposes.
In a parallel development for the derivatives sector, DerivaDEX, a DAO-governed perpetuals decentralized exchange built on Arbitrum, has received a test license from the Bermuda Monetary Authority (BMA). This regulatory approval allows live trading with real funds under oversight, marking a significant step toward compliant on-chain derivatives and potentially unlocking institutional participation. Avichal Garg, Co-Founder of Electric Capital, praised the launch for combining "high performance execution, on-chain settlement, and a clear regulatory framework."
Meanwhile, the market was reminded of the inherent risks in leveraged trading as a concentrated wave of futures liquidations erased approximately $135 million within a single hour on March 21, 2025, contributing to a 24-hour total exceeding $212 million. Data from Coinglass and Bybt showed the liquidations occurred predominantly on Binance, OKX, and Bybit, with long positions bearing the brunt of the losses. Analysts attributed the cascade to Bitcoin's rejection at a key resistance level near $72,000, which triggered a self-reinforcing feedback loop of automated sell-offs.
