dYdX CEO Says Institutions Are Driving Derivatives Shift

• Institutions entered crypto derivatives at scale and changed trading behavior in 2025.
• Firms now use these markets for hedging and portfolio management across major venues.
• The shift is pushing crypto infrastructure closer to traditional market standards.

Institutional investors have become a major force in crypto derivatives, according to dYdX CEO Charles d’Haussy. He said 2025 marked a key turning point as larger firms entered the market at scale. Their arrival changed the way these markets operate, moving activity away from mostly retail speculation and toward strategies built on hedging, portfolio construction, and risk control.

A Shift Away From Retail-Led Trading

Crypto derivatives were not designed only for speculation. In traditional finance, they help farmers lock in crop prices and allow companies to manage exposure to currencies or commodities. In digital assets, that original function faded as retail traders came to dominate the market.

For years, many retail participants used derivatives to increase short-term bets with leverage. That made crypto derivatives heavily tied to directional trading and fast price moves. As a result, speculative activity shaped much of the market’s early behavior.

D’Haussy said that the balance has now changed. In an interview with TheStreet Roundtable, he said institutions now play a major role in crypto derivatives markets. “It all started with retail,” he said. “Now institutions are really a major part of the crypto derivative markets overall.”

He described 2025 as the point when institutional involvement reached scale. That change brought in market participants with different goals, stronger infrastructure, and a more structured approach to risk.

Institutions Trade Across Multiple Venues

According to d’Haussy, institutions are not limiting their activity to crypto-native platforms. Instead, they are trading across both decentralized and traditional venues. Firms are active on decentralized exchanges such as dYdX, while also executing large volumes on established platforms like CME Group.

“That’s what’s interesting to see,” he said. “They’re leveraging traditional finance rails but also expanding into the DeFi space.” That pattern shows that institutional firms are combining familiar market systems with newer decentralized infrastructure.

This has started to change overall market behavior. Institutional traders tend to use derivatives to hedge, manage exposure, and build portfolios. Retail traders, by contrast, have often used them for short-term, leveraged positions tied to price direction.

As that mix changes, crypto derivatives begin to function more like they do in traditional markets. They become tools for managing risk instead of serving mainly as vehicles for leveraged speculation.

Exchanges Face New Demands

The rise in institutional participation has wider effects on trading platforms. Exchanges that want to attract this order flow must offer stronger risk controls, better transparency, and features that meet professional trading needs. They also face growing pressure to meet regulatory expectations.

That applies to both centralized and decentralized venues. Each must support more sophisticated users while still remaining accessible to retail traders. In turn, that pressure is pushing crypto market infrastructure closer to traditional financial standards.

Related: Solana Spot Trading Goes Live on dYdX for U.S. Users

D’Haussy called the current phase a rebalancing. “We’re seeing a new equilibrium happening,” he said. Different types of participants now operate in the same markets, but they bring very different goals and systems.

Greater institutional activity can improve liquidity and help with price discovery. It also raises expectations for reliability and risk management. At the same time, industry participants see this shift as part of a broader move that places crypto derivatives inside a larger financial framework. That includes products tied to DeFi protocols that offer regulated access points for institutional capital.