Crypto derivatives quietly became one of the biggest financial machines in the world in 2025.

According to new data from CoinGlass, total crypto derivatives trading volume surged to $86 trillion over the year, averaging roughly $265 billion every single day. That number alone signals how far the market has moved beyond its early, retail-driven phase.

At the center of this activity stood Binance. The exchange processed more than $25 trillion in derivatives volume, capturing close to 30% of global market share. In practical terms, nearly one out of every three dollars traded in crypto derivatives flowed through Binance.

Behind Binance, a small group of major exchanges dominated the landscape. OKX, Bybit, and Bitget each posted between $8.2 trillion and $10.8 trillion in annual volume. Combined, these four platforms accounted for more than 62% of all crypto derivatives trading, reinforcing how concentrated liquidity has become.

At the same time, institutional participation continued to reshape market structure. CoinGlass noted that growth in spot ETFs, options, and regulated futures created new pathways for traditional capital. This shift helped strengthen the role of Chicago Mercantile Exchange, which had already overtaken Binance in Bitcoin futures open interest in 2024 and further consolidated its position throughout 2025.

The nature of derivatives trading also evolved. What was once dominated by high-leverage retail speculation increasingly became a mix of institutional hedging, basis trades, and ETF-linked positioning. While this brought deeper liquidity and more sophisticated strategies, it also introduced new risks. Longer leverage chains and tighter interconnections across platforms increased the potential for systemic stress.

Those risks became visible throughout the year. Global derivatives open interest fell to around $87 billion during a sharp deleveraging in the first quarter, before rebounding strongly and peaking at $235.9 billion on October 7. That recovery, however, proved fragile.

In early Q4, the market experienced a sudden reset. More than $70 billion in positions were wiped out in a rapid deleveraging event, erasing roughly one-third of total open interest. Even after the shakeout, year-end open interest stood at $145.1 billion, still marking a 17% increase from the start of the year.

October delivered the clearest warning. CoinGlass estimates total forced liquidations in 2025 reached nearly $150 billion, with the most severe damage occurring on October 10 and 11, when liquidations exceeded $19 billion in just two days. The majority of losses came from long positions, with 85% to 90% of liquidations hitting traders betting on higher prices.

The takeaway is clear. Crypto derivatives are no longer a niche or purely speculative corner of the market. They are now deeply institutional, massively liquid, and structurally complex. That evolution brings efficiency and scale, but it also means that when stress hits, it moves faster, travels further, and carries far greater consequences than in earlier cycles.