Introduction

In the past year, with the rise of RWA and stock tokenization, leading crypto exchanges are increasingly "bringing traditional financial assets into their platforms": gold, foreign exchange, stock indices, and commodities have begun to appear within the crypto account system. Against the backdrop of a shift in the crypto cycle and a macroeconomic upturn, 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 crypto asset 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, its differences from perpetual contracts, and focus on two mainstream product routes: one represented by Bybit, Bitget, and Gate, which follows the MT5/CFD brokerage path, and the other represented by Binance, which follows the TradFi Perps perpetualization path. Furthermore, we will discuss the opportunities faced by 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 towards a "financial supermarket": the ultimate goal of TradFi may not just be the launch of more assets, but the accumulation of stablecoins, cross-market circulation, and the reconstruction of a multi-asset risk control system.

I. Background of the Rise of TradFi

The underlying logic of this round of TradFi expansion is not complex: macro volatility has become a more stable trading theme, with the strong performance of US stocks and significant movements in precious metals providing a continuous "tradeable narrative." The shift in the crypto cycle has amplified users' demand for "new trading materials"; at the same time, stablecoin margin, unified accounts, and mature brokerage trading systems have provided the infrastructure conditions for the "crypto distribution" of traditional asset trading. TradFi is seen as a new growth category: it not only meets macro trading demands but also serves the platform's goals of capital accumulation and retention.
1) Macro Themes and Market Catalysts: Rising Interest in Traditional Asset Trading
The trading heat in the crypto market is highly dependent on cycles and narratives, with the "validity period" of new coins and concepts becoming increasingly short; however, the trends in traditional assets are often driven by macro variables, providing more sustained trading reasons: interest rate expectations, inflation paths, geopolitical risks, and shifts in risk appetite continuously create trends and event windows for gold, foreign exchange, and stock indices. When US stocks maintain their strength and precious metals experience increased volatility, exchanges incorporating TradFi essentially transform "macro volatility across the entire market" into a tradeable traffic entry point within the platform.
2) Upgraded User Demand: Hedging and Multi-Asset Allocation Become Essentials
As traders mature, more people realize that only exposing themselves to crypto assets is equivalent to tying their investment portfolios to a single risk factor—once risk appetite reverses, the correlation of all positions will rise rapidly. The appeal of TradFi lies in its provision of a basket of assets that are less 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 wish to complete these allocations on the same platform rather than opening multiple accounts, switching margins, and arbitraging across systems. The launch of TradFi by exchanges is not merely "giving users another toy," but transforming "portfolio management" into an in-platform capability, thereby enhancing user retention and capital stay duration.
3) Mature Infrastructure Makes TradFi "Replicable and Scalable"
Stablecoins have become the de facto cross-market margin, solving the problem of "inconsistent funding forms" in traditional asset trading; unified accounts bring TradFi closer from an "independent system" to a "single capital pool," improving capital efficiency. Moreover, TradFi can be rapidly deployed across multiple exchanges, primarily because it has a replicable engineering path:

• The MT5/CFD route can directly reuse mature brokerage systems, migrating the entire set of rules such as spreads, commissions, overnight fees, and margin ratio liquidation into the product layer, allowing for quick implementation;
• The perpetualization route attempts to use a contract framework familiar to exchanges to carry traditional assets, combined with stablecoin margins and unified accounts, reducing user migration costs.

4) Competitive Pressure on Exchanges: Competing for "Overall Market Volatility" and Capital Accumulation
As it becomes increasingly difficult for crypto asset spot listings and single contract categories to sustain 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 rely solely on "crypto market trends," but to have tradeable themes even during crypto cooling periods;
• It enhances capital accumulation efficiency—users keep USDT on the platform to engage in TradFi, further forming a trading cycle between TradFi and crypto contracts/spots.

From a business logic perspective, TradFi is not merely "an enhancement to the product," but a redesign of the growth structure: it allows exchanges to transition from a single asset trading venue to a multi-category platform, competing for a broader share of trading volume.

II. Definition and Scope of TradFi

TradFi (Traditional Finance) does not mean allowing users to "buy the actual stocks or gold," but rather that exchanges package the price fluctuations of traditional assets into tradeable derivatives, enabling users to participate in the trading of macro assets such as gold, foreign exchange, stock indices, and commodities under a unified account and stablecoin margin system. The core of this product form is "trading price differences," rather than holding the assets themselves or obtaining corresponding rights.
It is important to clarify that "TradFi" in the context of crypto exchanges is not equivalent to RWA, nor is it equivalent to stock tokenization. Although all three refer to "traditional assets entering the crypto system," the essential differences are very clear: exchange TradFi is more of a derivative trading entry for traditional asset prices; RWA emphasizes on-chain confirmation of real assets and cash flows and their combinability; while stock tokens involve mapping of securities rights, custody structures, and regulatory permissions, belonging to a more sensitive compliance area.
In terms of specific product forms, exchange TradFi typically covers precious metals, foreign exchange, stock indices, commodities, and some stock derivatives. These assets are not on-chain assets but enter the trading system in the form of index quotation sources, where users trade 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
CFD typically centers on "difference settlement": users do not hold the underlying assets themselves but go long/short on price increases/decreases, with fixed leverage that cannot be manually adjusted. The cost structure usually consists of spreads, commissions, and overnight interest. It provides trading services for foreign exchange, US stock CFDs, indices, and commodities 24/5. Bybit, Bitget, and Gate belong to this category, and this route essentially transforms "the exchange into a brokerage entry": users open TradFi (MT5) accounts and trade traditional asset CFDs within the MT5 system.
(2) TradFi Perpetual Contract Route This route is more "crypto-oriented": it creates a contract experience similar to crypto perpetuals for traditional assets like precious metals and stocks, settled in USDT, with no expiration date, emphasizing a more unified in-platform experience. Binance is closer to this category, defining its TradFi perpetual contracts as USDT settled, tracking traditional asset prices, with margin and settlement methods similar to existing crypto perpetual contracts. Its key selling points are 24/7 continuous trading, using stablecoins like USDT for margin, and adjustable leverage.

2. TradFi (MT5/CFD) Contract Mechanism

Trading Target: CFDs essentially bet on the price fluctuations of the underlying assets, without involving delivery. You earn from the profit and loss brought by price changes, rather than holding the rights to the actual stocks or gold.
Cost Structure: Under the MT5 system, TradFi trading costs are broken down into: trading costs (spreads, per-hand commissions) + overnight swap
Trading Hours: Not 24/7, TradFi contracts usually have fixed trading hours and market closures, which can lead to gap risks and overnight fees: you face the traditional market rhythm of "market closure + gaps."
Liquidation Logic: Unlike crypto perpetuals, TradFi (MT5/CFD) generally triggers liquidation based on margin ratios. Common stop-loss lines are 50%, and once triggered, positions may be gradually liquidated based on "max loss priority."

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

|----------|----------------------------------------|------------------------------------| | Dimension | TradFi (CFD/MT5 Route) | Crypto Perpetual Contracts | | What is traded | Trading the price difference of traditional assets (not holding the underlying assets, no delivery) | Trading the price of crypto assets (perpetual derivatives, usually maintained at reasonable pricing using a marking price mechanism) | | Asset Categories | Gold/Silver, Foreign Exchange, Stock Indices, Commodities, some US stocks | Crypto assets like BTC/ETH/SOL, and various altcoins | | Trading Hours | Primarily market hours (with market closures) | 24/7 | | Quoting/Execution Style | Closer to "broker/MT5" system (spreads, per-hand commissions, overnight fees) | Closer to "exchange order book/matching" system (maker/taker, funding rates) | | Main Cost Structure | Spread + per-hand commission + overnight fee | Maker/taker fees + funding rates | | Leverage Features | Most varieties have preset/fixed leverage (not freely adjustable) | Most exchanges allow manual adjustment of leverage within limits | | High-Risk Points | Market closure gaps + overnight fee accumulation, as well as margin ratio triggering liquidation | Marking price/liquidation price triggering liquidation under extreme market conditions, funding rates significantly affect holding costs | | Liquidation Trigger Mechanism | Margin Ratio/Margin Level (Equity/Used Margin) | Maintenance Margin Rate + Mark Price + Liquidation Price |

III. Comparative Analysis of Major Exchanges' TradFi Products

As TradFi becomes a new battleground for exchanges, leading platforms have shown significant differentiation in product routes and user experiences. Bybit, Bitget, and Gate have chosen the MT5/CFD brokerage path, emphasizing rapid replication and strategic ecology; while Binance promotes TradFi perpetualization, emphasizing a unified entry and 24/7 trading experience. TradFi is becoming an important variable in the differentiated competition among exchanges.

1. MT5 + CFD Route

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

On June 3, 2025, Bybit renamed and upgraded "Gold & FX" to Bybit TradFi and integrated it into the Bybit App. In mid-October 2025, it began launching web/desktop versions and continued to expand trading in stock CFDs, indices, foreign exchange, and commodities. It emphasizes that users can trade gold, foreign exchange, commodities, indices, and stock CFDs based on USDT through a single application and wallet, without the need for currency conversion or application switching, enabling diversified investments between cryptocurrency and traditional markets 24/5. Additionally, Bybit has developed growth tools closer to crypto users around the MT5 ecosystem, such as TradFi Copy Trading, allowing newcomers to enter the traditional financial trading market through "copy trading."

• Bitget: Clear Classification, Emphasizing User Experience

Bitget launched TradFi in December 2025, clearly stating that TradFi allows participation in traditional asset CFD trading using USDT through TradFi accounts, covering foreign exchange, precious metals, commodities, and stock indices. It supports a maximum of 500x leverage, but leverage is preset by category and cannot be manually modified by users. TradFi accounts are priced in USDT, and if negative balance protection is enabled, the platform will automatically reset negative balances to zero, providing a more user-friendly experience. Bitget disclosed that approximately 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 Options + Perpetual Contracts, More Diverse User Choices

Gate TradFi also follows the traditional asset CFD model, with the underlying trading system being MT5. After transferring funds from USDT, they are displayed as USDx, which is the platform's internal accounting unit and is pegged 1:1 with USDT. Its feature is "multi-leverage productization of precious metals": in addition to the mainstream leverage framework that can reach up to 500x, it also breaks down gold into multiple contracts such as 20x/100x/200x, allowing the same underlying asset to cater to different risk preferences. Gate officially announced that since the launch of TradFi, the cumulative transaction volume has exceeded $20 billion, with peak daily transaction volume exceeding $5 billion.

2. Perpetual Contract Route

Binance: Making TradFi into "Exchange Perpetuals," Smoother 24/7 Trading On January 8, 2026, Binance officially announced the launch of TradFi perpetual contracts, supporting up to 100x leverage, and emphasizing its pricing and risk model under 24/7 trading. Binance's differentiation lies in "turning TradFi into perpetual contracts," emphasizing USDT settlement + unified contract entry + 24/7 continuous trading, creating a trading form familiar to crypto users with traditional assets. During market closures, special indices/marking prices and deviation constraints are designed to support 24/7 trading, with marking prices smoothed using EWMA during non-trading periods, and limiting deviations between marking prices and indices to reduce gap and abnormal liquidation risks.

|-------|---------------------------|-----------------------------------------------|---------------------------------------------|-------------------------------------------------------------------| | Dimension | Binance | Bybit | Bitget | Gate | | Contract Form | TradFi perpetual contracts, USDT settled | MT5 CFDs | MT5 CFDs | MT5 CFDs + perpetual contracts | | Asset Types | Metals, Stocks | Covers metals, stocks, indices, foreign exchange, commodities, etc., with the richest variety | Covers metals, indices, foreign exchange, commodities, etc. (stocks are listed separately, not part of TradFi) | Covers metals, stocks, indices, foreign exchange, commodities, etc. | | Account Requirements | No separate account needed, unified entry for Binance contracts | Requires activation of TradFi/MT5 sub-account | Requires activation of TradFi/MT5 sub-account | Requires activation of TradFi/MT5 sub-account | | Pricing Form | USDT (TradFi asset balances included in total asset statistics) | USDx (TradFi asset balances included in total asset statistics) | USDT (funds no longer counted in total platform assets after transferring to TradFi account) | USDx (funds no longer counted in total platform assets after transferring to TradFi account) | | Matching/Execution | Exchange contract matching, using the same margin/settlement framework as crypto perpetuals | MT5 system: STP (zero-fee model, costs included in spreads)/ECN (ultra-low spreads + per-hand commissions) two account modes | MT5 system, executed according to CFD market rules, overnight fees/liquidation rules, etc., closer to traditional CFD trading habits | MT5 system; executed according to CFD market rules, overnight fees/liquidation rules, etc., closer to traditional CFD trading habits | | Trading Hours | Supports 24/7 trading, with robust pricing and risk control mechanisms during non-trading periods | 24/5 trading framework, primarily based on TradFi market hours | 24/5 trading framework, primarily based on TradFi market hours | 24/5 trading framework, primarily based on TradFi market hours | | Fee Model | Contract trading fee model, participating in trading through USDT | Commissions calculated per "lot"; also has overnight swap fees; distinguishes between STP/ECN fee structures | Commissions calculated per "lot"; also has overnight swap fees | Commissions calculated per "lot"; also has overnight swap fees | | Leverage Adjustment | Up to 100x leverage, adjustable manually | Supports up to 500x; leverage fixed for each variety, not manually adjustable | Supports up to 500x; leverage fixed for each variety, not manually adjustable | Forex/metals/indices can reach up to 500x, and can provide multiple leverage contract options for gold (e.g., 20x/100x/200x), adjustable through contract entry |

IV. Challenges and Opportunities of TradFi

The volatility of macro assets brings new trading themes and product narratives to TradFi and is also an important opportunity window for the crypto industry to mature and move towards a multi-asset platform. However, the expansion of TradFi in exchanges is not without resistance. Fragmented regulation, pricing risks during market closures, technical risk control coupling, and user cognitive migration all determine that TradFi cannot simply replicate the growth model of crypto contracts.

Opportunity Windows for TradFi

1. Macro Asset Volatility Becomes "Trading Themes" for Crypto Users
The traditional growth methods of the crypto market rely on "new coins, new narratives, new cycles," while the trends in gold, foreign exchange, stock indices, and commodities are often driven by macro variables and events (interest rate expectations, inflation data, geopolitical risks, shifts in risk appetite), making them inherently more "explainable" and easier to form sustained trading reasons. This means that TradFi has the opportunity to become a stabilizer for exchanges to hedge against "altcoin cycle volatility"—when themes in the crypto space cool down, macro themes still exist, allowing exchanges to use TradFi to keep users engaged on the platform.
2. Web3 Integration Brings New Product Narratives
The key to Web3 integration is that the "forms of funds and collateral" in TradFi may be rewritten. When RWA/tokenized assets mature, TradFi does not have to remain permanently in the "isolated accounts" of MT5; it can form stronger combinability with on-chain assets: on-chain yield assets can serve as collateral, on-chain risk control profiles can be used for layered leverage, 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 its mature strategy ecology, essentially providing a calculable cost framework for more professional strategy users. Once exchanges make TradFi's strategy templates, copy trading, risk control prompts, and portfolio margining into "default capabilities," TradFi will no longer be just a temporary speculation when market conditions arise, but is more likely to become a daily habit for users: trend following, arbitrage, hedging, and event trading can all solidify into sustained trading volume.
4. Experience Certainty May Form Stronger User Trust
One long-standing criticism of crypto derivatives is that funding rates and risk parameters change rapidly, making it difficult for traders to predict costs. In contrast, the cost framework of MT5/CFD is closer to traditional financial habits (spreads/commissions/overnight fees), offering greater readability. If exchanges can make TradFi's costs, liquidation thresholds, and market closure risk prompts into "pre-trade simulations," it may differentiate itself from crypto perpetuals 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 focal point of scrutiny in most jurisdictions worldwide. For example, the EU's ESMA's CFD intervention measures set leverage limits for retail clients ranging from 30:1 to 2:1, 50% margin liquidation rules, negative balance protection, restrictions on inducement marketing, and mandatory risk warnings. The same product's accessibility, available leverage, marketing language, and even risk control parameters may be fragmented into multiple versions across different regions. If exchanges still attempt to drive growth with "a single global product," they will encounter friction throughout the entire chain of listing, deployment, conversion, and retention—either being forced to lower leverage, leading to decreased attractiveness, or shrinking the market they can cover due to compliance restrictions, ultimately becoming "able to do but not able to scale."
2. Pricing and Liquidity Gaps During Non-Trading Hours
The CFD/MT5 route follows traditional market trading hours, facing market closures: users not only have to bear overnight fees (swap/overnight fee), but also the execution risks brought by "gaps"—information accumulated during market closures will be reflected instantaneously at the opening, and stop-loss orders may execute at worse prices. The perpetualization route (like Binance's TradFi Perps) superficially offers 24/7 continuous trading, but the risks do not disappear; they merely shift to "model risks": when the underlying market is closed, how index prices, marking prices, funding costs, deviation constraints, and liquidation parameters are set will determine whether users encounter abnormal liquidations, extreme slippage, or unreasonable holding costs.
3. Technical and Risk Control Coupling Risks
The liquidation logic of MT5/CFD typically operates around margin levels, where users need to monitor Margin Level / Margin Ratio, rather than the familiar "mark price/liquidation price" in crypto perpetuals. This presents a significant cognitive migration cost for many crypto users: although both are leveraged trading, the risk indicators are completely different; adding unified accounts, multi-asset margins, and cross-category hedging functions makes risk exposure harder to explain, easily triggering chain liquidations and user dissatisfaction during sharp market fluctuations.
4. Entry Friction and Scaling Conversion Challenges
TradFi business naturally relies on strong stimuli for customer acquisition, such as macro hotspots, significant price fluctuations in gold, and index movements, but the conversion pathway can be blocked by real-world conditions: users often need to complete additional activations, extra risk disclosures, and regional compliance checks, with some platforms requiring separate TradFi/MT5 accounts to isolate them from original crypto accounts, creating "entry friction." This is why Binance's direct integration of TradFi Perps into the existing contract entry, emphasizing a unified experience without the need for additional accounts, may have a growth advantage—it reduces the friction cost from emotion to order placement.

V. Outlook and Conclusion on the Evolution of TradFi

The future evolution of TradFi in exchanges will not only be about "launching more assets," but also about systemic competition in product forms, compliance layering, and risk control experiences, promoting the accumulation of stablecoins and cross-market circulation, 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 strategization": making copy trading, strategy templates, cost calculators, margin alerts, and pre-trade risk simulations standard features, lowering the learning costs of traditional rules; at the same time, it will continue to expand in categories (indices/commodities/stock CFDs), normalizing macro themes as entry points. The perpetualization route will continue to expand its offerings and optimize risk control during market closures: Binance has already disclosed its market closure pricing mechanism (fixed indices, marking price EWMA, deviation constraints), and the next critical step is to "productize" these rules—allowing users to understand what will happen during market closures, how costs will change, and how liquidation thresholds will dynamically adjust at the time of opening positions.
2. Compliance Will Shift from "Can It Be Done" to "How to Layer It"
The regulatory direction is becoming clear: regional product distribution, stricter risk disclosures and suitability, restrictions on inducement incentives, and more standardized risk warnings. If exchanges want to make TradFi a long-term business, they must shift towards compliance zoning + risk layering + leverage grading: the tradable categories, leverage limits, and prompts seen by the same user under different regions and risk profiles will differ, and even marketing materials must be "compliance-generated." Compliance will no longer just be a legal cost but will become the underlying architecture for products and growth.
3. From Trading Volume-Driven to Asset Accumulation-Driven
The true value of TradFi is not merely adding another category, but enabling users to keep USDT on the platform to form cross-market circulation: traditional asset volatility provides trading motivation, while crypto assets provide high frequency and 24/7 scenarios, using stablecoins to support traditional asset trading. In the long run, TradFi will be deeply bound to the platform's unified accounts, risk control models, market-making depth, and user segmentation systems, forming a stronger moat.
4. From "Single Product Trading" to "Portfolio Risk Control"
The next stage of competition may not be "who lists more TradFi assets," but who can turn TradFi into a portfolio tool, using positions in gold/dollar indices to hedge crypto risks and using stock index trends to replace high beta altcoin risk exposure. This will require platforms to provide stronger explanations of portfolio margining, correlation prompts, stress testing, and position recommendations.

Conclusion

The rise of TradFi in crypto exchanges is a key sign of the industry transitioning from "single crypto narratives" to "multi-asset financial supermarkets." It allows exchanges to no longer rely solely on the crypto cycle but to accommodate a broader range of macro trading demands. For investors, the significance of TradFi is not just more leveraged assets, but new portfolio tools and risk management methods: using macro assets to hedge against the systemic risks of crypto positions, and replacing purely narrative speculation with more explainable market themes. The true winners in the next round of competition may not be the platforms that list the most assets, but those that can turn TradFi into a "sustainable, explainable, and trustworthy" multi-asset risk control system—because in the end, what remains is not the most exciting leverage, but the most stable experience and the clearest rules.

About Us

Hotcoin Research, as the core research institution of Hotcoin Exchange, is dedicated to transforming professional analysis into your practical tools. Through our "Weekly Insights" and "In-depth Reports," we analyze market trends for you; leveraging our exclusive column "Hotcoin Selection" (AI + expert dual screening), we help you identify potential assets and reduce trial-and-error costs. Every week, our researchers also engage with you face-to-face through live broadcasts, interpreting hot topics and predicting trends. We believe that warm companionship and professional guidance can help more investors navigate cycles and seize the value opportunities of Web3.

Risk Warning

The cryptocurrency market is highly volatile, and investing itself carries risks. We strongly recommend that investors conduct investments based on a full understanding of these risks and within a strict risk management framework to ensure the safety of their funds.
Website: https://lite.hotcoingex.cc/r/Hotcoinresearch
X: x.com/Hotcoin_Academy
Mail: labs@hotcoin.com