introduction

Over the past year, with the rise of RWA and stock tokenization, leading crypto exchage have been bringing more and more traditional financial assets into their platforms: gold, forex, stock indices, and commodities are all appearing in crypto account systems. Against the backdrop of a shift in the crypto cycle and a resurgence in macroeconomic conditions, TradeFi products have become a key weapon for exchanges to compete for trading volume, user retention, and capital accumulation. This is also an inevitable choice for exchanges to upgrade from single-asset trading platforms to multi-asset trading terminals.

This article will systematically analyze the background of the rise of TradeFi, its definition and mechanism, and its differences from perpetual contracts. It will focus on dissecting two mainstream product paths: one is the MT5/CFD brokerage path represented by Bybit, Bitget, and Gate; the other is the TradeFi Perps perpetual path represented by Binance. Furthermore, we will discuss the opportunities and regulatory fragmentation facing TradeFi, the risks of market closure pricing, and the challenges of risk control models. We will also look ahead to the future evolution of exchanges towards "financial supermarkets": the ultimate goal of TradeFi may not simply be the listing of more assets, but rather the consolidation of stablecoins, cross-market circulation, and the reconstruction of multi-asset risk control systems.

I. Background of the Rise of TradFi

The underlying logic of this round of TradeFi expansion is not complicated: macroeconomic fluctuations provide a more stable trading theme, the strong performance of US stocks and the surge in precious metals provide a continuous "tradable narrative," and the shift in crypto cycles amplifies users' demand for "new trading material." At the same time, stablecoin margins, unified accounts, and mature brokerage trading systems provide the infrastructure for "cryptographic distribution" of traditional asset trading. TradeFi is seen as a new growth category: both catering to macroeconomic trading needs and serving the platform's goals of fund accumulation and retention.

1) Macroeconomic themes and market catalysts: Increased trading activity in traditional assets

The trading activity in the crypto market is highly dependent on cycles and narratives, with new coins and concepts having increasingly shorter "expirations." However, the price movements of traditional assets are often driven by macroeconomic variables, providing more sustainable trading reasons: interest rate expectations, inflation paths, geopolitical risks, and shifts in risk appetite constantly create trend and event windows for gold, forex, and stock indices. When US stocks continue their strong performance and precious metal volatility amplifies, exchanges adding TradeFi essentially transforms "market-wide macroeconomic fluctuations" into tradable traffic entry points within their platforms.

2) Upgraded user needs: Hedging and multi-asset allocation become essential.

As traders become more sophisticated, more and more people realize that focusing solely on crypto asset exposure is tantamount to binding an entire portfolio to a single risk factor—once risk appetite reverses, the correlation between all positions will rise rapidly. TradFi's appeal lies in its provision of a basket of assets with lower correlation, suitable for hedging: gold can absorb safe-haven sentiment, forex reflects the dollar cycle, stock indices represent risk asset pricing, and commodities correspond to inflation and supply and demand shocks. Users want to complete these allocations on a single platform, rather than opening accounts, transferring margin, and arbitrage across multiple platforms. Exchanges launching TradFi are not merely "giving users another toy," but rather turning "portfolio management" into an in-platform capability, thereby improving user retention and the length of time funds remain on the platform.

3) Mature infrastructure makes TradFi "replicable and scalable"

Stablecoins have become de facto cross-market margin, solving the problem of inconsistent funding structures in traditional asset trading; unified accounts bring TradeFi closer to a unified funding pool from an "independent system," improving capital efficiency. Furthermore, TradeFi's rapid deployment across multiple exchanges is key to its replicable engineering path:

• The MT5/CFD route can directly reuse the mature brokerage system, and migrate the entire set of rules such as spreads/commissions/overnight fees and margin ratios into the product layer, which can be implemented quickly.
• The sustainable approach attempts to use a contract framework familiar to exchanges to carry traditional assets, combined with stablecoin margins and unified accounts, to reduce user migration costs.

4) Competitive pressure from exchanges: vying for "market-wide volatility" and capital accumulation.

As spot listings of crypto assets and single-product contracts become increasingly insufficient to support growth, exchanges must find new sources of trading volume. TradFi's core value lies in two points:

• It brings volatility beyond crypto to the platform, allowing exchanges to not only focus on "crypto trends" but also have tradable themes during crypto cooling-off periods;
• It improves the efficiency of capital accumulation—users leave USDT on the platform to trade TradeFi, further forming a trading cycle between TradeFi and crypto contracts/spot trading.

From a business perspective, TradeFi is not "icing on the cake" but a redesign of the growth structure: transforming exchanges from single-asset trading venues into multi-asset platforms, competing for a broader trading share.

II. Definition and Scope of TradFi

TradFi (Traditional Finance) doesn't allow users to "buy stocks or gold in their own right." Instead, the exchange packages the price fluctuations of traditional assets into tradable derivatives, enabling users to participate in trading macro assets such as gold, forex, stock indices, and commodities within a unified account and stablecoin margin system. The core of this product model is the "price difference," rather than holding the asset itself or obtaining corresponding rights.

It is important to clarify that "TradFi" in the context of crypto exchage is not the same as RWA, nor is it the same as stock tokenization. Although all three point to "traditional assets entering the crypto ecosystem," their fundamental differences are very clear: TradeFi on exchanges is more of an entry point for derivative trading of traditional asset prices; RWA emphasizes the on-chain confirmation and composability of real-world assets and cash flows; while stock tokens involve securities rights mapping, custody structures, and regulatory approvals, falling into a more sensitive compliance area.

In terms of specific product offerings, the TradeFi exchange typically covers precious metals, forex, stock indices, commodities, and some equity derivatives. These assets are not on-chain assets, but rather enter the trading system as index quote sources. Users trade price fluctuations rather than physical delivery.

1. TradFi's Mainstream Product Roadmap

Currently, the mainstream product roadmap of the TradeFi exchange mainly falls into two categories:

(1) CFD/MT5 route

CFDs typically revolve around "spread settlement": users do not hold the underlying asset but instead profit from price increases or decreases by long or short. Leverage is fixed and cannot be manually adjusted. The cost structure usually consists of spreads, commissions, and overnight interest. They offer 24/5 trading services for forex, US stock CFDs, indices, and commodities. Bybit, Bitget, and Gate belong to this category. This approach essentially "turns the exchange into a brokerage gateway": users open a TradeFi (MT5) account and trade traditional asset CFDs within the MT5 system.

(2) The first route of TradeFi perpetual contracts is more "crypto-oriented": it makes traditional assets such as precious metals and stocks into contracts with a similar experience to crypto perpetual contracts, settled in USDT, with no expiration date, emphasizing a more unified in-exchange experience. Binance is closer to this category. Binance defines it as: TradeFi perpetual contracts settled in USDT, tracking the prices of traditional assets, with margin and settlement methods similar to existing crypto perpetual contracts. Its key selling points are 24/7 continuous trading, use of stablecoins such as USDT for margin, and adjustable leverage.

2. TradeFi (MT5/CFD) Contract Mechanism

Trading instrument: CFDs are essentially bets on the price fluctuations of an underlying asset, without involving delivery. You earn profits or losses from price changes, not the rights to hold the underlying stock or gold.

Fee Structure: TradeFi trading fees under the MT5 framework are broken down into: trading costs (spreads, commission per lot) + overnight swap.

Trading Hours: Not 24/7. TradeFi contracts typically have fixed trading hours and market closures, which introduces features such as gap risk and overnight fees. You are facing the traditional market rhythm of "market closure + gap". Liquidation Logic: Unlike crypto perpetual contracts, TradeFi (MT5/CFD) generally triggers liquidation based on margin ratio. A common stop-loss level is 50%, and after triggering, positions may be liquidated gradually according to "maximum loss priority".

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

III. Comparative Analysis of TradeFi Products on Major Exchanges

As TradeFi becomes a new battleground for exchanges, leading platforms are showing significant divergence in their product strategies and user experiences. Bybit, Bitget, and Gate are opting for a brokerage-like approach with MT5/CFD, emphasizing rapid replication and a robust strategy ecosystem; while Binance is pushing for TradeFi sustainability, highlighting a unified entry point and a 24/7 trading experience. TradeFi is becoming a crucial variable in the competitive differentiation among exchanges.

1. MT5 + CFD route

• Bybit: A leading TradFi CFD exchange with the most diverse range of investment options.

On June 3, 2025, Bybit rebranded and upgraded "Gold & FX" to "Bybit TradFi" and integrated it into the Bybit App. Web and desktop versions were launched in mid-October 2025, with ongoing expansion into stock CFDs, indices, forex, and commodities trading. The emphasis is on enabling users to trade gold, forex, commodities, indices, and stock CFDs based on USDT through a single application and wallet, without currency exchange or app switching, allowing for 24/5 diversified investment between cryptocurrencies and traditional markets. Furthermore, Bybit is developing growth drivers more relevant to crypto users within the MT5 ecosystem, such as TradFi Copy Trading, allowing newcomers to enter the traditional financial trading market through copy trading.

• Bitget: Clearly categorized, emphasizing user experience.

Bitget launched TradeFi in December 2025, clarifying that TradeFi allows users to participate in traditional asset CFD trading using USDT through TradeFi accounts, covering forex, precious metals, commodities, and stock indices. It supports up to 500x leverage, but leverage is preset by asset type and cannot be manually modified by the user. TradeFi accounts are denominated 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 non-crypto products accounted for approximately 11.75% of its total trading volume in January, with TradeFi's daily trading volume reaching $4 billion.

• Gate: Multiple leverage options + perpetual contracts offer users more choices.

Gate.com's TradFi also utilizes the traditional asset CFD model, with the underlying trading system being MT5. Funds transferred from USDT are displayed in USDx, which serves as the platform's internal unit of account and is pegged 1:1 to USDT. A key feature is its "multi-tiered leverage productization for precious metals": in addition to the mainstream leverage framework up to 500x, gold is split into multiple contracts such as 20x, 100x, and 200x, allowing the same asset to suit different risk appetites. Gate.com officially announced that TradFi has accumulated over $20 billion in trading volume since its launch, with peak daily trading volume exceeding $5 billion.

2. Perpetual Contract Approach

Binance: Making TradeFi a "Perpetual Exchange," Smoother 24/7 Trading. On January 8, 2026, Binance officially announced the launch of TradeFi perpetual contracts, supporting leverage up to 100x, and emphasizing its pricing and risk model under 24/7 trading. Binance's differentiation lies in "making TradeFi a perpetual contract," emphasizing USDT settlement + unified contract entry + 24/7 continuous trading, using traditional assets to create a trading format familiar to crypto users. During market closures, dedicated index/mark price and deviation constraints are designed to support 24/7 trading. During non-trading hours, the mark price is smoothed using EWMA, and deviations between the mark price and index are limited to reduce gap and abnormal liquidation risks.

IV. TradeFi Challenges and Opportunities

Macroeconomic asset volatility has brought new trading themes and product narratives to TradeFi, and also represents a significant window of opportunity for the crypto industry to mature and move towards multi-asset platforms. However, TradeFi's expansion on exchanges is not without obstacles. Regulatory fragmentation, pricing risks during market closures, the coupling of technical risk control, and the shift in user perception all determine that TradeFi cannot simply replicate the growth model of crypto contracts.

TradFi's Window of Opportunity

1. Macroeconomic asset volatility becomes a "trading theme" for crypto users.

The traditional growth model of the crypto market relies on "new coins, new narratives, and new cycles," while the price movements of gold, forex, stock indices, and commodities are often driven by macroeconomic variables and events (interest rate expectations, inflation data, geopolitical risks, and shifts in risk appetite), making them inherently more "explainable" and easier to justify sustained trading. This means that TradeFi has the potential to become a stabilizer for exchanges to hedge against the "Altcoin cycle volatility"—when crypto themes cool down, macroeconomic themes still exist, and exchanges can use TradeFi to keep users engaged.

2. Web3 convergence brings new product narratives

The key to Web3 integration lies in the potential rewriting of TradeFi's "funding and collateral structure." As RWA/tokenized assets mature, TradeFi will no longer need to remain permanently in an "isolated account" on MT5. It can form stronger composability with on-chain assets: on-chain yield assets can be used as margin, on-chain risk profiles can be used for leverage stratification, and on-chain clearing and settlement can reduce dependence on a single system.

3. Shift TradeFi from "opportunity-driven" to "habit-driven".

The advantage of TradFi (especially the MT5 system) lies in its mature strategy ecosystem, essentially providing a calculable cost framework for more professional strategic users. Once exchanges make TradFi's strategy templates, copy trading, risk control alerts, and portfolio margin "default capabilities," TradFi will no longer be just 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 be converted into sustained trading volume.

4. Experiencing certainty can foster stronger user trust.

One long-standing criticism of crypto derivatives is the rapid fluctuation of funding rates and risk parameters, making it difficult for traders to predict costs. In contrast, the cost framework of MT5/CFD is closer to traditional financial practices (spreads/commissions/overnight fees) and is more readable. If exchanges can make TradeFi's costs, liquidation thresholds, and market closure risk warnings "pre-emptive," it could differentiate itself from crypto perpetual bonds in terms of "experience certainty," attracting more rational and strategic funds.

Real-world challenges of TradFi

1. Regulatory uncertainty and regional fragmentation

Regulatory uncertainty: CFDs are a key area of ​​scrutiny in most jurisdictions globally. For example, the EU's ESMA intervention measures for CFDs include tiered leverage caps for retail clients ranging from 30:1 to 2:1, a 50% margin liquidation rule, negative balance protection, restrictions on misleading marketing, and mandatory risk warnings. The availability, leverage, marketing language, and even risk control parameters of the same product may be split into multiple versions across different regions. If exchanges still attempt to achieve growth with a single global product, they will encounter friction throughout the entire process of listing, deployment, conversion, and retention—either being forced to reduce leverage, leading to decreased attractiveness, or shrinking the market reach due to compliance restrictions, ultimately becoming "capable of doing it, but unable to grow it significantly."

2. Pricing and liquidity gaps during non-trading hours

CFD/MT5 trading follows traditional market trading hours, facing market closures and shutdowns. Users not only bear overnight fees but also the execution risk brought by "gaps"—information accumulated during market closures is reflected all at once at the opening, and stop-loss orders may be executed at a worse price. While perpetual trading (such as Binance's TradeFi Perps) superficially offers 24/7 continuous trading, the risk does not disappear but is transferred to "model risk": when the underlying market is closed, how the index price, mark price, funding costs, deviation constraints, and liquidation parameters are set determines whether users will encounter abnormal liquidations, extreme slippage, or unreasonable holding costs.

3. Risks associated with the coupling of technology and risk control

The liquidation logic in MT5/CFD typically revolves around margin levels. Users need to monitor the Margin Level/Margin Ratio, rather than the "mark price/liquidation price" familiar in crypto perpetual contracts. This represents a significant cognitive shift cost for many crypto users: while both are leveraged trading, the risk indicators are completely different; furthermore, features such as unified accounts, multi-asset margins, and cross-asset hedging make risk exposure more difficult to interpret, easily triggering chain liquidations and user dissatisfaction during periods of sharp market volatility.

4. Import friction and challenges in large-scale transformation

TradFi businesses naturally rely on strong incentives for customer acquisition, such as macroeconomic hot topics, large fluctuations in gold prices, and index trends. However, the conversion process is often hampered by practical limitations: users often need to complete additional account openings, additional risk disclosures, and regional compliance verifications. Some platforms even require separate TradFi/MT5 accounts to isolate them from the original crypto accounts, creating "entry friction." This is why Binance integrates TradFi Perps directly into the existing contract entry point, emphasizing that a unified experience without the need for additional accounts will have a greater growth advantage—it reduces the friction costs from emotional engagement to order placement.

V. Development Prospects and Conclusions of TradFi

The future evolution of TradeFi on exchanges will not only involve "listing more assets," but will be a systemic competition in product form, compliance tiers, and risk control experience, driving the accumulation and cross-market circulation of stablecoins and forming a new moat for exchanges.

The Evolution of TradFi

1. Product forms will continue to differentiate, but they will also learn from each other.

The MT5/CFD approach will strengthen its "low-barrier strategy": making copy trading, strategy templates, cost calculators, margin alerts, and pre-position risk drills standard features to reduce the learning cost of traditional rules; at the same time, it will continue to expand its product categories (index/commodity/equity CFDs), making macro themes a regular entry point. The perpetual approach will continue to expand its underlying assets and optimize market closure risk control: Binance has clearly disclosed its market closure pricing mechanism (fixed index, EWMA mark price, deviation constraints), and the next crucial step is to "productize" these rules—allowing users to understand what happens during market closures, how costs change, and how liquidation thresholds are dynamically adjusted when opening a position.

2. Compliance has shifted from "can it be done?" to "how to do it in stages?"

The regulatory direction is basically clear: regionalized product distribution, stricter risk disclosure and suitability requirements, restrictions on misleading incentives, and more standardized risk warnings. If exchanges want to make TradeFi a long-term business, they must shift towards compliant regionalization + risk stratification + leverage tiering: the tradable categories, leverage limits, and warning methods will differ for the same user in different regions and with different risk profiles; even marketing materials must be "compliantly generated." Compliance will no longer be just a legal cost, but will become the underlying architecture for product development and growth.

3. Shifting from transaction volume-driven to asset accumulation-driven

The true value of TradFi lies not in adding another product category, but in enabling users to retain USDT on the platform, creating a cross-market cycle: traditional asset volatility provides trading motivation, crypto assets offer high-frequency trading and 24/7 availability, and stablecoins serve as a buffer for traditional asset trading. In the long run, TradFi will be deeply integrated with the platform's unified account system, risk control model, market depth, and user segmentation system, forming a stronger competitive advantage.

4. From "single-item transactions" to "combined risk control"

The next phase of competition is likely not about "who lists more TradeFi assets," but rather who can develop TradeFi into a portfolio tool to hedge crypto risk with gold/USD index positions and replace high-beta Altcoin risk exposure with stock index trend allocations. This will require platforms to provide stronger explanations of portfolio margin requirements, correlation indicators, stress testing, and position sizing recommendations.

Conclusion

The rise of TradFi on crypto exchage is a key indicator of the industry's shift from a "single crypto narrative" to a "multi-asset financial supermarket." It allows exchanges to move beyond relying solely on crypto cycles and cater to broader macroeconomic trading needs. For investors, TradFi's significance lies not only in offering more leveraged assets but also in providing new portfolio tools and risk management methods: hedging the systemic risk of crypto positions with macroeconomic assets and replacing pure narrative speculation with more interpretable market themes. The real winners of the next round of competition will not necessarily be the platforms listing the most assets, but rather those that can develop TradFi into a "sustainable, interpretable, and trustworthy" multi-asset risk control system—because ultimately, what remains is not the most exciting leverage, but the most stable experience and the clearest rules.

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