Author: Henry Kim, Ryan Yoon; Source: Tiger Research; Compiler: Shaw, Golden Finance

Summary of key points

• The limitations of the cryptocurrency trading fee model, the rise of perpetual futures decentralized exchanges (DEXs) led by Hyperliquid, and a more relaxed regulatory environment following the Trump administration have combined to prompt the world's major cryptocurrency exchanges to reconsider their development direction.

• The path these exchanges are currently taking points to traditional financial products such as stocks and derivatives, and operating structures similar to traditional finance.

• The problem is that centralized exchanges (CEX) have been the main liquidity providers supporting the cryptocurrency ecosystem. If they withdraw from this role, the cryptocurrency market may not function as well as before.

• Cryptocurrency projects are entering a period of self-reliance. There is going to be a divide between projects that can survive without the support of exchanges and projects that cannot.

1. Buy Apple stocks on Binance

As of June 1, users can purchase stocks such as Apple (AAPL) and Alphabet (GOOGL) directly through the Binance app. The next day, Binance announced that it would list the stocks of SK Hynix, Samsung Electronics and Hyundai Motor. These three stocks are all the most actively traded stocks on the Korea Composite Stock Price Index (KOSPI).

Binance’s interest in the stock market began in 2021. In April of that year, the exchange launched tokenized stock trading covering Tesla (TSLA), Apple (AAPL) and Microsoft (MSFT), but due to increasing regulatory pressure, the service was completely shut down in July of the same year. Three structural issues make the product unsustainable: the legal classification of equity tokens (securities or derivatives) is not yet clear; the investor prospectus required by EU regulations is missing; and Binance itself does not hold a direct license to operate such a service. The German Federal Financial Supervisory Authority (BaFin), the British Financial Conduct Authority (FCA) and the Hong Kong Securities and Futures Commission (SFC) all raised objections based on the above reasons.

This launch uses a different structure. Binance executes orders through a broker licensed by the Abu Dhabi Global Market (ADGM), making the service clearly legally defined as a brokerage. The issue of the underlying tool issuer that previously caused controversy in 2021 has now been basically eliminated.

The timing is quite intriguing. Bybit launched the TradFi perpetual futures market around the same time, covering the Korea Composite Stock Price Index (KOSPI) constituent stocks including SK Hynix and Samsung Electronics, as well as the perpetual futures of SpaceX (SPCX). Coinbase also later announced support for SPCX futures trading.

The question is why the major cryptocurrency exchanges started moving in the same direction at almost the same time, moving away from a pure cryptocurrency model toward one more akin to traditional financial services applications.

2. Three types of pressure

There are three factors that are driving exchanges to gradually abandon the pure cryptocurrency model.

2.1. Decline in cryptocurrency trading volume

The first pressure comes from the decline in cryptocurrency trading volume. Exchange revenue is ultimately tied to altcoin trading volume, which in turn depends on market sentiment.

On Binance, average daily spot trading volume has fallen by about 80%, from a peak of about $45 billion in October 2025 to $7.7 billion today. Trading volumes on other centralized exchanges combined fell by about 70%, from a peak of about $63 billion to $18.8 billion. As transaction volume declines, the fee-based profit model begins to break down. In fact,a business model that relies on cryptocurrency transaction fees cannot produce a sustainable profit structure, which the exchanges themselves have long realized.

2.2. Hyperliquid undertakes on-chain transaction volume

Comparing the trading volumes of other cryptocurrencies other than Bitcoin and Ethereum to the trading volumes of RWA assets on the Hyperliquid platform, including stocks and commodities, a clear picture of the current situation can be seen.

Hyperliquid has begun attracting on-chain liquidity by supporting stock and commodity futures trading. As of mid-2026, 23 of Hyperliquid’s top 30 assets by trading volume for perpetual futures were stocks and commodities, not cryptocurrencies.

The premise that on-chain activity is limited to cryptocurrencies is no longer true. The emergence of decentralized exchanges, whose trading volume is comparable to that of centralized exchanges, has sounded the alarm to these centralized exchanges.

2.3 Regulatory changes

The third pressure comes from changes in the regulatory environment after the Trump administration came to power. The U.S. Securities and Exchange Commission dropped its lawsuit against Coinbase and Kraken. At a time when regulators are hostile, applying for a traditional financial license does carry risks. Now, these license plates can become a symbol of credibility and a mark of differentiation.

With clearer boundaries around what is and is not allowed, exchanges can build on existing strengths and explore new directions. These three pressures converged at about the same time as interest in stocks and other derivatives grew. If cryptocurrency exchanges want to survive, they have no choice but to move quickly along their own path.

3. Countermeasures of centralized exchanges

Centralized exchanges are facing the same pressure at the same time, but their responses are completely different.

3.1. Binance: the all-inclusive platform

Binance’s strategy is simple. Its goal is to become an all-inclusive payment platform that limits all transaction activities within its own platform and prevents user churn.

Binance has already successfully entered the on-chain market. The company first established its own exchange business, then launched Binance Chain in April 2019 to capture the on-chain ecosystem, and launched Binance Alpha in the first half of 2025 to capture a significant share of the on-chain market.

However, by 2026, on-chain liquidity began to move to the stock market. When Hyperliquid quickly soaked up this liquidity through stocks and commodities, Binance’s painstaking on-chain user base came under pressure. Binance’s response strategy is not to directly compete with Hyperliquid on the chain, but to focus on launching stock trading services for its more than 200 million existing users. It's clearly more advantageous to retain existing users than to go head-to-head with Hyperliquid on its turf.

The structure works as follows: Orders submitted through the Binance front-end are received by Nest Trading, a licensed broker in the Abu Dhabi Global Market (ADGM), which in turn forwards the order to Alpaca Securities. Execution, clearing, settlement and custody are all handled by Alpaca. Binance does not hold securities directly, a structural choice that shields it from direct securities regulation.

It is worth noting that Nest Trading has been identified as an affiliate of Binance. Binance also holds a minority stake in Alpaca, and under a revenue-sharing agreement, Nest Trading receives 50% of order flow fees and 65% of stock lending revenue.

Binance is building its own infrastructure to transform into a financial super app and trying to retain existing users before altcoin trading volumes shift further toward highly liquid cryptocurrencies and stocks.

3.2. Bybit: dual-track method

Bybit launched in 2018 as a derivatives exchange and quickly grew with up to 100x leverage and low fees. Currently, it is promoting two businesses at the same time: porting liquidity from centralized exchanges to the blockchain, and directly launching traditional asset derivatives on centralized exchanges.

On-chain transactions were launched first. In June 2025, Bybit listed Backed’s xStocks token on its spot market, marking its first step in tokenized stock cooperation. In November of the same year, Bybit collaborated with Mantle and Backed to officially launch xStocks on the Mantle blockchain, covering a number of major U.S. stocks including Nvidia (NVDA) and Apple (AAPL).

In May 2026, Bybit enabled the atomic RFQ function on Fluxion, a decentralized exchange within the Mantle ecosystem, and upgraded the transaction structure to be executed directly to the issuer. Atomic RFQ works by requesting quotes directly from the issuer rather than going through an automated market maker (AMM), enabling on-chain execution quality that institutional participants have come to expect in traditional finance.

Bybit has also moved towards centralization. Facing similar pressure as Binance, Bybit launched TradFi perpetual futures in April 2026 and added new contracts every week. Major U.S. stocks including Tesla (TSLA), Nvidia (NVDA) and Apple (AAPL), as well as gold, silver and crude oil, are now available for 24-hour trading and settled in USDT. Perpetual futures for Samsung Electronics, SK Hynix and Hyundai Motor were officially launched on June 4, and pre-IPO trading for SpaceX was also launched.

The ultimate goal of both development paths is to build infrastructure to more accurately trade traditional assets on-chain and off-chain trading venues. The difference between Bybit and Binance is that Bybit is committed to maintaining an active on-chain business through Fluxion and Mantle, rather than focusing entirely on a centralized platform.

3.3. Coinbase: America’s Most Trusted Exchange

Coinbase will be listed on Nasdaq in 2021 and will be included in the S&P 500 Index in May 2025. With the support of Wall Street, it is currently the most institutionally reputable centralized exchange.

Coinbase has also maintained an on-chain business. Its Ethereum L2 Base token, launched in 2023, has grown rapidly, accounting for nearly half of L2’s total value locked (TVL) by 2025. However, by 2026, growth had stalled and Base no longer seemed to be a core priority for the company.

Coinbase’s highest priority is institutional customers. In August 2025,the company completed its acquisition of Deribit for $2.9 billion, capturing approximately 85% of the global crypto options market. Coinbase subsequently expanded its institutional client base by launching a futures commission merchant (FCM) service licensed by the U.S. Commodity Futures Trading Commission (CFTC) and introducing cross-margin trading, which consolidates spot, futures and perpetual futures positions into a single collateral pool. Institutional loan balances from hedge funds and asset managers hit quarterly highs that year.

In December 2025, Coinbase launched commission-free stock and ETF trading within its existing app. Unlike Binance, which uses independent brokerage infrastructure and an indirect trading model, Coinbase offers direct trading based on its accumulated regulatory credibility. On June 4, Coinbase announced support for SpaceX’s pre-IPO trading.

As Hyperliquid builds liquidity outside of regulation by launching a broad range of products, Coinbase’s early entry into the stock trading space puts it in a better position to react.

3.4. Kraken: A Federal Crypto Bank

Founded in 2011, Kraken is one of the oldest exchanges in the cryptocurrency industry. Its strategy is to consolidate licenses, build out infrastructure directly, and become a federally regulated institutional cryptocurrency custodian bank.

Regulatory infrastructure construction has always been a top priority. In March 2025, Kraken acquired NinjaTrader for US$1.5 billion, obtained a futures commission merchant (FCM) license from the U.S. Commodity Futures Trading Commission (CFTC), and has 2 million retail trading users. In April 2026, Kraken acquired Bitnomial for US$550 million. Bitnomial is the only cryptocurrency native platform to obtain all three CFTC licenses (DCM, DCO and FCM) within ten years. In March 2026, Kraken obtained the Federal Reserve master account and submitted an application for a national trust company charter to the U.S. Office of the Comptroller of the Currency (OCC) in May of the same year.

Kraken has not neglected its on-chain business. The company launched its L2 protocol Ink in December 2024, and later launched the lending protocol Tydro and the perpetual DEX Nado on top of it. DeFi Earn will be launched in January 2026, and Bitcoin Vault will be launched in May of the same year. These products are built around assets that can be clearly explained to institutional clients. Additionally, altcoins are not a priority for Kraken’s on-chain strategy.

While other exchanges have moved into stock trading to retain users, Kraken has chosen a different path with the goal of becoming the only crypto-native bank that institutional clients can trust.

The strategies of the centralized exchanges listed in this article vary, but what they all have in common is that altcoins are not a priority in their future plans.

4. What is the future of cryptocurrencies?

Centralized exchanges have always been the backbone of liquidity in the crypto ecosystem. They list tokens and generate trading volume, and it is this support that keeps most crypto projects alive.

The fundamental problem is that few crypto projects have proven their true value through real revenue. The maintenance of the token price does not rely on the fundamentals of the protocol, but on exchange listings and early liquidity support mechanisms (such as launch pools). To maintain this structure, exchanges and traders need to maintain continued interest in cryptocurrencies. Retail trading volume is shrinking, and without retail trading volume, exchange listing and marketing support will decrease as well. This structure cannot be maintained indefinitely.

The market itself has shifted towards tokens issued by projects that can prove their value through actual product revenue, rather than relying on exchange-backed tokens. Hyperliquid’s HYPE is the most obvious example. While Hyperliquid itself draws on-chain liquidity from the cryptocurrency market to the stock market, HYPE is currently one of the best performing crypto assets. This suggests that the mutually beneficial relationship that once existed between centralized exchanges and crypto projects is weakening.

The current situation of exchanges also confirms this view. Retail trading volume and user numbers are the cornerstones of any exchange's business. Today, focusing solely on cryptocurrency trading volumes threatens to shake that foundation, as the market becomes less attractive to newly listed crypto assets than it once did. Exchanges have no choice but to look for other revenue streams while protecting their existing infrastructure and user base.

It is this trend that is driving exchanges' transformation into equity derivatives, income products and custody businesses. In the process of adjusting their strategies, exchanges have effectively allowed altcoins to fend for themselves.

In previous recessions, centralized exchanges have weathered bear markets alongside cryptocurrencies. Now, they are seeking a path away from cryptocurrencies themselves. Because of this, the impact of this recession on cryptocurrencies may be more severe than any previous one.