REALITY CHECK | Traditional Bitcoin Futures Market Down 97% in 5 Years as Perpetuals, Options Gain Ground

Bitcoin’s derivatives market is increasingly shifting away from traditional dated futures as perpetual contracts take a larger share of leveraged trading and options gain ground in hedging and volatility strategies.

Dated Bitcoin futures activity across offshore crypto-native venues tracked by Glassnode has fallen about 97% from its 2021 level, while options have expanded from roughly a quarter of crypto-native Bitcoin derivatives open interest to nearly half. Options gained market share in four of the five market regimes studied since 2019.

The shift does not mean futures have disappeared.

Instead, the market has increasingly divided their traditional functions between

• perpetual contracts, which allow traders to maintain leveraged positions without an expiry date, and
• options, which provide tools for hedging, downside protection and volatility trading.

Perpetual contracts have become the dominant instrument for traders seeking straightforward leveraged exposure to Bitcoin.

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Unlike conventional futures, perpetuals do not expire and use funding payments between longs and shorts to keep prices close to the underlying asset.