Coinbase (COIN) Sees TradFi Institutions Driving Crypto Derivatives Boom

Coinbase, following its acquisition of Deribit, anticipates a major shift in the crypto derivatives market, driven by traditional finance (TradFi) institutions, particularly asset managers from the U.S. and Europe. Usman Naeem, Coinbase's global head of derivative sales, noted that historically, over three-quarters of derivatives activity was concentrated in Asia, but this is expected to rebalance as non-market maker institutions enter the space. These TradFi players seek risk-managed strategies beyond simple liquidity provision, utilizing derivatives for hedging and scaling up investments, which contrasts with the speculative nature often seen in perpetual futures popular in Asia. Naeem suggests this influx will lead to volatility services more aligned with traditional finance, such as selling upside to fund downside insurance, ultimately bringing more liquidity and stability to the market. Addressing recent volatility, Naeem stated that infrastructure performed as designed during flash crashes, with liquidations occurring as intended, emphasizing that the dynamics of perpetual futures require tighter risk controls.

(Source：CoinDesk)