More than a year has passed since the SEC approved Bitcoin spot ETFs, a milestone event that has not only transformed the spot market landscape but also profoundly impacted the derivatives market. According to the latest market analysis report released by BlockInsight, the introduction of ETFs has comprehensively reshaped the structure, liquidity, and participant composition of the contract trading market. This report provides an in-depth analysis of the long-term effects of ETFs on the derivatives market and offers strategic advice for traders in this evolving environment.
According to data reported by Bloomberg in January 2025, since the approval of the first Bitcoin ETFs in January 2024, these products have attracted over $25 billion in net inflows during their first year, significantly exceeding most analysts’ expectations. Meanwhile, according to Financial Times statistics, the global crypto derivatives market’s daily average trading volume has grown by approximately 83% during this year, reaching historic high levels.
“The successful introduction of Bitcoin ETFs represents an important step in integrating crypto assets with the traditional financial system,” BlockInsight points out in the report. “This integration has not only brought changes in capital volume but has also triggered deep-level transformations in the entire market structure and participant behavior.”
The report first analyzes the evolution of liquidity structure over the year. Citing market depth data from Bloomberg Terminal, the depth of buy and sell orders for Bitcoin futures and perpetual contracts has increased by approximately 75% since ETF listings, while average spreads have narrowed by 31%. The latest data published by the Chicago Mercantile Exchange (CME) shows that the daily average trading volume of its Bitcoin futures contracts has increased by 93% compared to the same period last year, reaching an all-time high, indicating significantly enhanced institutional participation.
BlockInsight cites a recent Wall Street Journal research report: “The launch of ETFs has opened the door for traditional financial institutions to participate in the Bitcoin market. These institutions are not only allocating funds to spot ETFs but are also increasingly using the derivatives market for risk management and strategy execution.” According to a market survey released by Morgan Stanley in January 2025, approximately 47% of institutional investors surveyed indicated they are already using crypto derivatives as a supplementary strategy to their Bitcoin ETF holdings.
In terms of market volatility, BlockInsight references the crypto market volatility indicator published by S&P Dow Jones Indices. The data shows that Bitcoin’s 30-day volatility index has decreased from an average of 65% before ETF listings to the recent 42%, indicating the market has become more mature and stable. At the same time, The Economist recently reported that institutional investor participation has improved the efficiency of market price discovery, reducing abnormal fluctuations caused by purely speculative activities.
Risk pricing mechanisms have also undergone fundamental changes over the past year. BlockInsight analyzed options market data provided by Skew Analytics and found that the implied volatility curve for Bitcoin options has noticeably smoothed, reflecting standardization in market expectations for price movements. In particular, Goldman Sachs noted in its Q4 2024 market report that the basis between Bitcoin futures and spot has stabilized at more reasonable levels, with the annualized basis rate for long-term contracts narrowing from an average of 15-20% before ETF launch to the current 7-11%.
On the regulatory front, BlockInsight noted positive changes brought by the successful operation of ETFs. Reuters recently reported that the Chairman of the U.S. Commodity Futures Trading Commission (CFTC) indicated the agency is considering providing a clearer regulatory framework for compliant crypto derivatives trading platforms. According to the Financial Times, EU regulatory authorities are also evaluating regulatory pathways for Bitcoin ETF-like products, which could further standardize the European crypto derivatives market.
In response to the profound market changes over the year, BlockInsight, combining research views from institutions like JPMorgan and Goldman Sachs, offers several trading strategy recommendations. First, for retail investors, the current market environment may no longer be suitable for traditional high-leverage short-term strategies. Barclays Bank’s market analysis indicates that in institution-dominated markets, short-term price noise is reduced but medium-term trend changes accelerate, reducing the effectiveness of high-frequency trading strategies.
Fidelity Investments emphasized in its early 2025 market outlook that basis arbitrage and calendar spread strategies are performing excellently in the current environment. According to LSEG (formerly Refinitiv) data, hedge funds focusing on crypto arbitrage strategies achieved an average return of 15.7% in 2024, significantly higher than the 9.2% from purely directional strategies.
The latest market report released by the Chicago Board Options Exchange (CBOE) shows that the daily average trading volume of Bitcoin options has increased by 156% compared to pre-ETF listings, with open interest increasing by 189%, reflecting that the options market has developed into a mature risk management ecosystem. BlackRock’s market strategists noted in a recent investor report that structured options strategies have become standard tools for institutional investors managing Bitcoin risk exposure.
For contract trading platforms, the trend toward market share concentration is evident. According to CryptoCompare’s latest industry report, the market share of the top three crypto derivatives exchanges has increased from 58% in early 2024 to the current 71%, with market consolidation proceeding faster than expected. Morgan Stanley’s industry analysts predict this consolidation trend will continue over the next year, with only platforms focused on specific market segments or offering unique services able to survive in the intense competition.
Regarding the impact of ETFs on the correlation between crypto markets and traditional financial markets, BlockInsight cites research data from the Federal Reserve Bank of New York. The research found that over the past year, Bitcoin’s correlation with the S&P 500 index has risen from 0.21 in early 2024 to the current 0.36, while correlation with the NASDAQ index has increased from 0.26 to 0.41, indicating Bitcoin is gradually being integrated into a broader asset allocation framework.
“One year of actual data clearly shows that ETFs have fundamentally changed Bitcoin’s positioning as an asset class,” BlockInsight concludes. “As a recent Financial Times editorial pointed out, Bitcoin has transformed from a marginalized speculative asset to a standard component of global asset allocation, and the profound impact of this transformation will continue for many years.”
Looking ahead, BlockInsight expects the ETF ecosystem to expand further. Deutsche Bank research indicates that with the launch of Ethereum ETFs and the development of more specialized crypto ETF products, the derivatives market will continue to develop toward specialization and structuring. Goldman Sachs particularly emphasizes in its 2025 market outlook that institutional-grade risk management products, such as volatility control strategies and structured products, will be the main growth points in the next phase.
As the boundaries between crypto markets and traditional finance have become increasingly blurred one year after ETF launches, BlockInsight believes the derivatives trading market has completed a historic transformation and will continue to develop in a more mature and diversified direction in the coming years.
