Introduction

In the past year, with the rise of RWA and tokenization of stocks, leading cryptocurrency exchanges are bringing more and more traditional financial assets "into the platform": gold, foreign exchange, stock indices, and commodities have begun to appear in the cryptocurrency account system. Under the dual background of switching cryptocurrency cycles and the strengthening macro environment, TradFi products have become key weapons for exchanges to compete for trading volume, retention, and capital accumulation. This is also an inevitable choice for exchanges to upgrade from a single cryptocurrency trading venue to a multi-asset trading terminal.

This article will systematically analyze the background of the rise of TradFi, the definition and mechanism of TradFi, the differences from perpetual contracts, and focus on breaking down two mainstream product routes: the first is the MT5/CFD brokerage path represented by Bybit, Bitget, and Gate, and the second is the TradFi Perps permanent path represented by Binance. Furthermore, we will discuss the opportunities facing TradFi as well as the challenges of fragmented regulation, market closure pricing risks, and risk control model challenges, and look forward to the future evolution trend of exchanges' "financial supermarketization": the ultimate goal of TradFi may not just be the launch of more underlying assets, but the accumulation of stablecoins, cross-market circulation, and the reconstruction of multi-asset risk control systems.

1. Background of the Rise of TradFi

The underlying logic of this round of TradFi expansion is not complex: macro fluctuations have become a more stable trading theme, with strong U.S. stocks and significant gold markets providing a continuous "tradable narrative" that amplifies users' demand for "new trading materials" during cryptocurrency cycle transitions; at the same time, stablecoin margin requirements, unified accounts, and mature brokerage trading systems have provided the infrastructural conditions for traditional asset trading to achieve "cryptographic distribution." TradFi is seen as a new growth category: it meets macro trading needs and serves the platform’s goals of capital accumulation and retention.

1) Macro Themes and Market Catalysts: The Rise in Traditional Asset Trading Heat

The trading heat in the cryptocurrency market is highly dependent on cycles and narratives, with the "validity period" of new coins and new concepts becoming increasingly short; however, traditional asset markets are often driven by macro variables, providing more sustained trading rationale: expectations around interest rates, inflation trajectories, geopolitical risks, and shifting risk appetites continuously create trends and event windows for gold, foreign exchange, and stock indices. When U.S. stocks remain strong and gold and silver show large fluctuations, exchanges incorporating TradFi essentially convert "overall market macro fluctuations" into tradable traffic entry points on their platforms.

2) Upgrading User Demand: Hedging and Multi-Asset Allocation Become Necessities

As traders mature, more people realize that only exposing themselves to cryptocurrency assets equates to tying their investment portfolios to a single risk factor—once risk preference reverses, all position correlations will quickly rise. The appeal of TradFi lies in its provision of a basket of assets that are lower-correlated and can be used for hedging: gold can absorb risk-averse sentiment, foreign exchange reflects the dollar cycle, stock indices represent the pricing of risk assets, and commodities correspond to inflation and supply-demand shocks. Users hope to complete these allocations on a single platform rather than opening multiple accounts, switching margins, and arbitraging across systems. The introduction of TradFi by exchanges does not merely serve to "give users another toy," but transforms "portfolio management" into an internal capability, thereby enhancing user retention and capital stay time.

3) Mature Infrastructure Makes TradFi "Replicable and Scalable"

Stablecoins have become a de facto cross-market margin, resolving the issue of inconsistent capital forms in traditional asset trading; unified accounts bring TradFi closer from an "independent system" to "a single capital pool," increasing capital efficiency. Moreover, TradFi can be rapidly rolled out across multiple exchanges, mainly due to its replicable engineering path:

• The MT5/CFD route can directly reuse established brokerage systems, transferring the entire set of rules such as spreads, commissions, overnight fees, and margin ratio liquidations into the product layer for fast implementation;

• The perpetualization route attempts to carry traditional underlying assets using a contract framework familiar to exchanges, combined with stablecoin margins and unified accounts, thereby reducing user migration costs.

4) Competitive Pressure on Exchanges: Competing for "Overall Market Volatility" and Capital Accumulation

As the issuance of cryptocurrency spot listings and single contract categories becomes increasingly challenging to support growth, exchanges must seek new sources of trading volume. The core value of TradFi lies in two points:

• It brings volatility from outside the crypto space into the platform, allowing exchanges to no longer solely depend on "crypto market conditions," but still possess tradable themes during periods of cryptocurrency cooling;

• It enhances the efficiency of capital accumulation—users leave USDT on the platform for TradFi, further forming a trading loop between TradFi and crypto contracts/spot trades.

From a business logic perspective, TradFi is not merely "an icing on the cake for products," but a redesign of the growth structure: allowing exchanges to transition from single asset trading venues to multi-category platforms, competing for broader trading shares.

2. Definition and Scope of TradFi

TradFi (Traditional Finance) does not mean that users "buy the underlying stock or gold," but rather that exchanges package the price fluctuations of traditional assets into tradable derivatives, enabling users to participate in trading macro assets like gold, foreign exchange, stock indices, and commodities under a unified account and stablecoin margin system. The essence of this product form is about "trading price differences," rather than holding the assets themselves or obtaining corresponding rights.

It is important to clarify that "TradFi" in the context of cryptocurrency exchanges is not equivalent to RWA, nor to stock tokenization. While all three point toward "traditional assets entering the cryptocurrency system," the essential differences are very clear: exchange TradFi is more of a derivative trading entry point for traditional asset prices; RWA emphasizes the on-chain confirmation and combinability of real assets and cash flows; while stock tokens involve mapping of securities rights, custody structures, and regulatory approvals, belonging to a more sensitive compliance field.

In terms of specific product forms, exchange TradFi typically covers precious metals, foreign exchange, stock indices, commodities, and certain equity derivatives. These assets are not on-chain assets but enter the trading system in the form of index price quotes, with users trading price fluctuations rather than physical deliveries.

1. Mainstream Product Routes of TradFi

Currently, the mainstream product routes of exchange TradFi are mainly divided into two paths:

(1) CFD/MT5 Route

CFDs are generally centered around "difference settlement": users do not hold the underlying asset itself but rather bet on the price rising or falling, with fixed leverage that cannot be manually adjusted; cost structures typically consist of spreads, commissions, and overnight interest. This route provides 24/5 trading services for foreign exchange, U.S. stock CFDs, indices, and commodities. Bybit, Bitget, and Gate belong to this category; the essence of this path is to "turn the exchange into a brokerage entry point": users open a TradFi (MT5) account and trade traditional asset CFDs within the MT5 system.

(2) TradFi Perpetual Contract Route
This route is more "crypto-oriented": it turns traditional underlying assets like precious metals and stocks into experiences similar to crypto perpetual contracts, settled in USDT with no expiration date, emphasizing a more unified in-platform experience. Binance is closer to this category, which defines its TradFi perpetual contracts as contracts settled in USDT that track traditional asset prices, using margin and settlement methods similar to existing crypto perpetual contracts. The key selling points are 24/7 continuous trading, using stablecoins like USDT for margin, and adjustable leverage.

2. TradFi (MT5/CFD) Contract Mechanism

Trading Objects: CFDs essentially bet on the price rises and falls of the underlying without involving delivery. You earn from the profit and loss brought about by price movements rather than holding rights to the actual stock or gold.

Fee Structure: Under the MT5 system, TradFi trading fees are broken down into: trading costs (spread, per-lot commission) + overnight swap fees.

Trading Hours: Not 24/7; TradFi contracts usually have fixed trading hours and market closures, which can bring features such as gap risks and overnight costs: you face the “market closure + gap” rhythm of traditional markets.
Forced Liquidation Logic: Unlike crypto perpetuals, TradFi (MT5/CFD) generally triggers forced liquidations based on margin ratios. Common stop-loss lines are at 50%, and once triggered, positions may be gradually closed at “maximum loss priority”.

3. TradFi (MT5/CFD) VS Crypto Perpetual Contracts

3. Comparative Analysis of Major Exchanges' TradFi Products

As TradFi becomes a new battlefield for exchange competition, the leading platforms show clear differentiation in product routes and user experiences. Bybit, Bitget, and Gate have chosen the MT5/CFD brokerage path, emphasizing fast replication and strategic ecosystem; Binance promotes the perpetualization of TradFi, emphasizing a unified entry point and 7×24 trading experience. TradFi is becoming a significant variable in the differentiated competition among exchanges.

1. MT5 + CFD Route

• Bybit: Leader in Exchange TradFi CFD with the Richest Underlying Asset Selection

On June 3, 2025, Bybit will rename and upgrade "Gold & FX" to "Bybit TradFi," integrating it into the Bybit App. In mid-October 2025, it will launch on the web/desktop version while continually expanding stock CFDs, indices, foreign exchange, and commodity trading. It emphasizes that users can trade gold, foreign exchange, commodities, indices, and stock CFDs based on USDT through one application and one wallet without the need for currency exchange or app switching, allowing diversified investments between cryptocurrencies and traditional markets 24/5. Furthermore, it is expanding growth initiatives more aligned with crypto users around the MT5 ecosystem, such as TradFi Copy Trading, which allows beginners to enter the traditional finance trading market through "copying trades."

• Bitget: Clear Category, Emphasizing User Experience

Bitget launched TradFi in December 2025, clearly defining TradFi as participating in traditional asset CFD trading using USDT through a TradFi account, covering foreign exchange, precious metals, commodities, and stock indices. The maximum leverage supported is 500 times, but leverage is preset by category and cannot be manually adjusted by users. The TradFi account is valued in USDT, and if negative balance protection is enabled, the platform will automatically reset any negative balance to zero, resulting in a more user-friendly experience. Bitget revealed that around 11.75% of its total trading volume in January came from non-crypto products, with daily TradFi trading volume reaching $4 billion.

• Gate: Multiple Leverage Choices + Perpetual Contracts, More Diverse User Options

Gate’s TradFi also follows the traditional asset CFD model, with an underlying trading system based on MT5. After funds are transferred from USDT, they are displayed as USDx; USDx is an internal accounting unit of the platform that is pegged 1:1 to USDT. It features "multi-leverage productization for precious metals": aside from the mainstream category leverage framework that reaches up to 500x, it breaks down gold into multiple contract choices such as 20x/100x/200x, adapting the same underlying asset to different risk preferences. Gate officially announced that since the launch of TradFi, total trading volume has exceeded $20 billion, with peak daily transactions surpassing $5 billion.

2. Perpetual Contract Route

Binance: Making TradFi into "Exchange Perpetual," Smoother 24/7 Trading
On January 8, 2026, Binance announced the launch of TradFi perpetual contracts, supporting up to 100x leverage while emphasizing its pricing and risk model under 7×24 trading. Binance's differentiation lies in "turning TradFi into perpetual contracts," stressing USDT settlement + a unified contract entry + 7×24 continuous trading, shaping trading forms familiar to crypto users from traditional assets. Special indices/mark prices and deviation constraints have been designed during the underlying market's closure period to support 24/7 trading. During non-trading periods, mark prices are smoothed using EWMA, and constraints are placed on the deviation between mark prices and indices to reduce gap and abnormal forced liquidation risks.

4. Challenges and Opportunities for TradFi

Macro asset fluctuations bring new trading themes and product narratives to TradFi, and it is an important opportunity window for the cryptocurrency industry to mature and move towards multi-asset platformization. However, the expansion of TradFi within exchanges is not without resistance. Fragmented regulation, market closure pricing risks, technical and risk control coupling, and user cognitive migration all determine that TradFi is difficult to simply replicate the growth model of crypto contracts.

Opportunity Windows for TradFi

1. Macro Asset Fluctuations Become "Trading Themes" for Crypto Users

The traditional growth method in the cryptocurrency market relies on "new coins, new narratives, new cycles," whereas the trends of gold, foreign exchange, stock indices, and commodities are often driven by macro variables and events (interest rate expectations, inflation data, geopolitical risks, shifting risk preferences), making them inherently "more explainable" and easier to form sustained trading rationales. This means that TradFi has the opportunity to become an anchor for exchanges to hedge against the fluctuations in the "altcoin cycle"—when cryptocurrency narratives cool down, macro themes still exist, allowing exchanges to use TradFi to keep users on the platform.

2. Web3 Integration Brings New Product Narratives

The key to Web3 integration is that the "forms of capital and collateral" in TradFi may be redefined. Once RWA/tokenized assets mature, TradFi does not have to permanently reside in the "isolated accounts" of MT5; it can form stronger combinability with on-chain assets: on-chain yield-bearing assets can serve as collaterals, on-chain risk control images can be used for leverage stratification, and on-chain clearing and settlement can reduce dependence on a single system.

3. Transforming TradFi from "Opportunity-Driven" to "Habit-Driven"

The advantage of TradFi (especially the MT5 system) is that its strategic ecosystem is mature, essentially providing a calculable cost framework for more specialized strategy users. Once exchanges turn TradFi's strategy templates, copy trading, risk control tips, and portfolio margin into "default capabilities," TradFi is likely to evolve from being a temporary speculation during favorable market conditions to a part of users' daily habits: trend following, arbitrage, hedging, and event trading can all solidify into sustained trading volume.

4. Experience Certainty Can Foster Stronger User Trust

A long-standing critique of crypto derivatives has been that the funding rates and risk parameters fluctuate rapidly, making it hard for traders to predict costs. In contrast, the cost framework of MT5/CFD more closely resembles traditional financial habits (spreads/commissions/overnight fees), making it more readable. If exchanges can make the costs of TradFi, forced liquidations thresholds, and market closure risk prompts "pre-rehearsed before entering positions," it may indeed differentiate itself from crypto perpetual contracts in terms of "experience certainty," attracting more rational and strategic capital.

Real Challenges for TradFi

1. Regulatory Uncertainty and Regional Fragmentation

Regulatory uncertainty: CFDs are a focus of scrutiny in most jurisdictions worldwide. Taking the EU's ESMA interventions as an example, measures include setting tiered leverage caps for retail customers from 30:1 to 2:1, a 50% margin forced liquidation rule, negative balance protection, restrictions on inducive marketing, and compulsory risk warnings. The same product’s accessibility, available leverage, marketing strategies, and even risk control parameters may be fragmented into multiple versions across different regions. If exchanges still attempt to run growth with "a single global product," they will face friction across the entire chain of listing, distribution, conversion, and retention—either being forced to reduce leverage, leading to decreased attractiveness, or shrinking the market coverage due to compliance limitations, ultimately becoming "feasible but not scalable."

2. Pricing and Liquidity Gaps During Non-Trading Hours

The CFD/MT5 route follows traditional market trading hours, facing closures and end-of-day situations: users not only bear overnight fees (swap/overnight fees) but also the execution risks brought by "gaps"—information accumulated during market closures will be reflected in one instant at the next opening, potentially resulting in stop-loss executions at worse prices. The perpetualization route (such as Binance's TradFi Perps) superficially offers 24/7 continuous trading, but the risks do not disappear; they merely shift to "model risks": how to set index prices, mark prices, funding costs, deviation constraints, and forced liquidation parameters during underlying market closures determines whether users will encounter extreme forced liquidations, slippage, or unreasonable holding costs.

3. Technical and Risk Control Coupling Risks

MT5/CFD's forced liquidation logic typically revolves around margin levels, with users needing to focus on Margin Level / Margin Ratio rather than familiar "mark prices/liquidation prices" in crypto perpetuals. This represents a significant cognitive migration cost for many crypto users: while both are leveraged trading, the risk indicators are entirely different; adding unified accounts, multi-asset margins, and cross-category hedging features makes risk exposure harder to interpret, potentially triggering chain liquidations and user dissatisfaction during acute market fluctuations.

4. Entry Friction and Scaling Transformation Challenges

TradFi business inherently relies on strong stimuli for customer acquisition, such as macro hotspots, large fluctuations in gold prices, and index movements; however, real conditions may block conversion routes: users often need to complete additional account openings, additional risk disclosures, and regional compliance verifications. Some platforms also require separate TradFi/MT5 accounts to isolate from original crypto accounts, creating "entry friction." This is also why Binance’s approach of directly incorporating TradFi Perps into its existing contract entry, emphasizing a unified experience without requiring additional accounts, has greater growth advantages—it reduces the friction cost from sentiment to placing orders.

5. Outlook and Conclusion on the Evolution of TradFi

The future evolution of TradFi in exchanges will not only involve "launching more underlying assets," but also systemic competition in product forms, compliance stratification, and risk control experiences, promoting stablecoin accumulation and cross-market circulation, thus forming a new moat for exchanges.

Outlook on the Evolution of TradFi

1. Product Forms Will Continue to Differentiate, but Will Borrow from Each Other

The MT5/CFD route will strengthen "low-threshold strategy": making copying trades, strategy templates, cost calculators, margin alerts, and pre-position risk rehearsals standard features, lowering the learning costs of traditional rules; at the same time, continuing to expand product categories (indices/commodities/equity CFDs) to normalize macro themes as entry points. The perpetualization route will continue to expand underlying assets and optimize market closure risk control: Binance has clearly disclosed its market closure pricing mechanism (fixed indices, mark price using EWMA, deviation constraints); the next key step is to productize these rules—enabling users to understand what will happen during closures, how costs will change, and how forced liquidation thresholds will dynamically adjust when opening positions.

2. Compliance Will Shift from "Can Do" to "How to Layer"

The regulatory direction is basically clear: decentralized product distribution, stricter risk disclosures and suitability, restrictions on inducive incentives, and more standardized risk warnings. If exchanges want to make TradFi a long-term business, they must shift towards compliance divisions + risk stratification + tiered leverage: the same user will see different tradable categories, leverage limits, warning methods, and even marketing materials that must be "compliance-generated" under different regional and risk profile conditions. Compliance will no longer be merely a legal cost but will transform into the underlying architecture of products and growth.

3. From Volume-Driven to Asset Accumulation-Driven

The true value of TradFi is not just an additional category but enabling users to leave USDT on the platform to form cross-market circulation: traditional asset fluctuations provide the trading motivation, while crypto assets provide high frequency and 7×24 scenarios, using stablecoins to bridge traditional asset trading. In the long run, TradFi will be deeply intertwined with the platform’s unified accounts, risk control models, market-making depth, and user stratification systems, forming a stronger moat.

4. From "Single Item Trading" to "Portfolio Risk Control"

The next stage of competition may not be "who lists more TradFi assets," but rather who can turn TradFi into a portfolio tool to hedge crypto risks with positions in gold/the US dollar index and substituting high Beta altcoin risk exposures with stock index trends. This will require the platform to provide stronger explanations of portfolio margins, correlation alerts, stress tests, and position suggestions.

Conclusion

The rise of TradFi in cryptocurrency exchanges is a key marker of the industry's transition from "single cryptocurrency narratives" to "multi-asset financial supermarkets." It allows exchanges to no longer rely solely on cryptocurrency cycles but to accommodate a broader range of macro trading needs. For investors, the significance of TradFi is not only more leveraged products but also new portfolio tools and risk management methods: using macro assets to hedge the systematic risks of crypto positions, replacing purely narrative speculations with more explainable market themes. The true winners in the next competition may not be the platforms that list the most assets but those that can make TradFi a "sustainable, explainable, and trusted" multi-asset risk control system—because what ultimately remains is not the most stimulating leverage, but the most stable experience and clearest rules.

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