Tiger Research: CEXs Embrace Stocks, Are Altcoins Being Abandoned?

Key Takeaways

• The growth model of cryptocurrency spot trading fee models has peaked, the rise of decentralized perpetual contract exchanges like Hyperliquid, and the loosening regulatory environment following the Trump administration's assumption of power—these multiple factors combined are prompting the world's top crypto exchanges to readjust their development directions.
• Major exchanges are now laying out traditional financial categories such as stocks and financial derivatives, and their operational models are gradually aligning with traditional financial institutions.
• However, problems follow. Centralized exchanges have always been the core liquidity providers for the entire crypto ecosystem. If exchanges gradually weaken their core crypto business, the original operating order of the entire crypto market could be completely disrupted.
• From now on, crypto projects enter a phase of self-reliance. Whether they can operate independently without exchange support will become a watershed moment for project development, and the industry landscape is set for significant divergence.

Trading Apple Stock on Binance

Starting June 1st, users can directly trade US stocks like Apple (AAPL) and Alphabet (GOOGL) via the Binance App. The following day, Binance announced the addition of trading for KOSPI index constituent stocks, including the three most actively traded Korean stocks: SK Hynix, Samsung Electronics, and Hyundai Motor.

Binance's foray into stock trading can be traced back to 2021. In April of that year, the platform launched tokenized stock trading, supporting stocks like Tesla (TSLA), Apple (AAPL), and Microsoft (MSFT). However, due to increasing regulatory pressure, the service was fully discontinued in July of the same year. The business was unsustainable then, primarily due to three structural challenges: the legal classification of stock tokens as securities or derivatives remained unresolved; the products lacked investor prospectuses as required by EU regulations; and Binance itself did not have the direct qualifications to conduct such business. Regulators including BaFin (Germany), the FCA (UK), and the SFC (Hong Kong) raised objections based on these issues.

The re-launch of stock trading services features a significantly revamped overall structure. Binance now executes orders through a licensed broker in the Abu Dhabi Global Market (ADGM). The service is clearly defined as a securities brokerage service, completely circumventing the previous legal disputes. The core contradiction that led to the 2021 shutdown—the ambiguity surrounding the issuer of the underlying assets—has now been largely resolved.

These industry moves are notably concurrent. During the same period, Bybit also launched a perpetual contract market for traditional financial categories, listing contracts for Korean stocks like SK Hynix and Samsung Electronics, as well as a perpetual contract for SpaceX (SPCX). Coinbase soon followed, announcing support for SPCX contract trading.

The reasons behind this collective pivot by major crypto exchanges—abandoning the pure cryptocurrency trading model for comprehensive traditional financial service platforms—are worth exploring in depth.

Three Driving Forces for Transformation

Three external pressures are jointly pushing exchanges away from the pure cryptocurrency operational model.

Declining Cryptocurrency Trading Volume

The primary pressure comes from the shrinking overall cryptocurrency trading volume. Exchange core revenue stems from cryptocurrency trading fees, and trading volume is entirely dictated by market sentiment.

Binance's average daily spot trading volume has fallen sharply from its peak of approximately $45 billion in October 2025 to just $7.7 billion today, a decline of nearly 80%. The combined spot trading volume of all other centralized exchanges has also fallen from a peak of $63 billion to $18.8 billion, a drop of about 70%. The shrinking trading volume means the business model reliant on trading fees is becoming unsustainable. Major exchanges have long recognized that relying solely on cryptocurrency trading fees cannot build a sustainable revenue system.

Hyperliquid Diverts On-Chain Liquidity

Comparing data clearly reveals the current market landscape: the gap is evident when comparing the trading volume of altcoins (excluding Bitcoin and Ethereum) with the volume of real-world assets like stocks and commodities on the Hyperliquid platform.

Hyperliquid continuously absorbs on-chain liquidity by listing perpetual contracts for stocks and commodities. By mid-2026, among the top 30 perpetual contract trading volumes on the platform, 23 are stocks and commodities, with cryptocurrency instruments becoming the minority.

The on-chain market is no longer the exclusive domain of cryptocurrencies. The trading volume of a single decentralized exchange is now comparable to that of traditional centralized exchanges, serving as a wake-up call for major CEXs.

Regulatory Environment Shift

The third pressure stems from the overall change in regulatory direction following the Trump administration's assumption of power. The US Securities and Exchange Commission (SEC) dismissed lawsuits against Coinbase and Kraken. During periods of strict regulatory attitudes, applying for traditional financial licenses carried extremely high compliance risks; now, with clearer regulatory boundaries, various financial licenses not only serve as endorsements for compliant operations but also become competitive advantages for platforms seeking differentiation.

Within a clear regulatory framework, exchanges can leverage their existing advantages to explore new development directions. The convergence of these three pressures simultaneously, coupled with rising market demand for stocks and various financial derivatives, forces top exchanges to accelerate their transformation and forge new development paths to ensure long-term survival.

Strategies of Major Centralized Exchanges

Facing the same industry predicament, each centralized exchange has chosen a distinctly different development path.

Binance: Building a Comprehensive Financial Super Platform

Binance's development approach is clear: create a one-stop comprehensive trading platform, retaining all user trading activities within its own ecosystem to prevent user churn.

Binance had already ventured into the on-chain track early on and achieved considerable success. The platform first built its centralized exchange business, then launched Binance Smart Chain in April 2019, entering the on-chain ecosystem. In the first half of 2025, it launched the Binance Alpha product, successfully capturing a significant on-chain market share.

However, entering 2026, on-chain liquidity began shifting towards stock categories. Hyperliquid took the lead, continuously capturing liquidity with stock and commodity-related products, directly impacting Binance's long-accumulated on-chain user base. In response, Binance chose not to compete head-on with Hyperliquid in the on-chain space. Instead, it took a different approach, launching stock trading services for its over 200 million existing users. Compared to engaging in a battle on the opponent's turf, retaining existing users is clearly the safer choice.

The specific operational model is as follows: User orders submitted on the Binance frontend are first received by Nest Trading, a licensed broker in the Abu Dhabi Global Market, which then forwards them to Alpaca Securities for subsequent processing. Alpaca handles all order execution, clearing, settlement, and asset custody. Binance does not directly hold the underlying securities assets. This structural design allows it to avoid the jurisdiction of direct securities regulation.

Notably, Nest Trading has been confirmed as an affiliated entity of Binance, and Binance also holds a minority stake in Alpaca. The two parties have signed a revenue-sharing agreement, with Nest Trading entitled to 50% of order flow fees and 65% of securities lending income.

Currently, Binance is independently building a full suite of supporting infrastructure, comprehensively transitioning into a financial super app. Before altcoin liquidity further flows to Hyperliquid and the stock market, the platform is fully focused on consolidating its existing user base.

Bybit: Dual-Track Development Model

Founded in 2018, Bybit started in the derivatives trading space, achieving rapid expansion through high leverage (up to 100x) and low fees. The platform now employs a dual-track strategy, centralization and on-chain: migrating centralized exchange liquidity to blockchain networks while directly listing traditional financial asset derivatives on its centralized platform.

The platform's layout began with on-chain initiatives. In June 2025, Bybit listed tokenized stock products launched by Backed on its spot trading section, officially taking its first step into tokenized stocks. In November of the same year, Bybit partnered with the Mantle public chain and Backed to officially launch the xStocks product on the Mantle blockchain, covering major US stocks like NVIDIA (NVDA) and Apple (AAPL).

In May 2026, Bybit launched an Atomic Quote feature on Fluxion, a decentralized exchange within the Mantle ecosystem. Instead of using an automated market maker (AMM) to match orders, this feature directly obtains quotes from asset issuers, allowing on-chain trading to meet the execution standards required by traditional financial institutions.

Bybit has also been active on its centralized business front. Facing similar industry pressures as Binance, the platform launched perpetual contracts for traditional financial categories in April 2026 and has been adding new instruments weekly. Currently, major US stocks like Tesla (TSLA), NVIDIA (NVDA), and Apple (AAPL), as well as commodities like gold, silver, and crude oil, are available for 24/7 trading settled in USDT. On June 4th, perpetual contracts for Samsung Electronics, SK Hynix, and Hyundai Motor were officially listed, and the platform also opened trading for SpaceX pre-IPO shares.

The ultimate goal of both business tracks is to build robust infrastructure, bridge on-chain and off-chain scenarios, and enable sophisticated trading of traditional financial assets. Unlike Binance, Bybit hasn't placed all its focus on its centralized platform; it continues to deepen its on-chain ecosystem by leveraging Fluxion and the Mantle public chain.

Coinbase: The Most Trusted Exchange in the US Market

Listed on Nasdaq in 2021 and added to the S&P 500 index in May 2025, Coinbase is backed by Wall Street capital and is currently the most institutionally recognized centralized crypto exchange globally.

Coinbase also maintains its on-chain presence. It launched the Ethereum Layer 2 network Base in 2023, which experienced rapid growth, at one point accounting for nearly half of the total value locked (TVL) among Layer 2 networks in 2025. However, Base's growth stagnated entering 2026, and it is no longer the company's core development focus.

At this stage, Coinbase's strategic center of gravity has fully shifted towards institutional clients. In August 2025, the company completed the acquisition of Deribit for $2.9 billion, capturing approximately 85% of the global crypto options market share. Subsequently, the platform obtained a Futures Commission Merchant (FCM) license from the U.S. Commodity Futures Trading Commission (CFTC) and launched cross-margin trading functionality, integrating spot, futures, and perpetual contract positions into a single margin account, further expanding its institutional client base. That year, hedge funds and asset management firms set a quarterly record for loan balances on the platform.

In December 2025, Coinbase launched zero-commission stock and ETF trading services within its own app. While Binance uses an indirect model connecting to external brokers, Coinbase leverages its years of accumulated compliance qualifications to conduct stock trading directly. On June 4th, the platform announced support for trading pre-IPO shares of SpaceX.

While Hyperliquid continuously enriches its products and accumulates liquidity in regulatory gray areas, Coinbase's early move into stock trading gives it more proactive leverage in navigating the industry's transformation.

Kraken: Marching Towards a Federal Crypto Bank

Founded in 2011, Kraken is one of the longest-standing exchanges in the crypto industry. Its core strategy involves continuously acquiring various financial licenses and building proprietary infrastructure, with the ultimate goal of creating a federally regulated crypto asset custody bank.

Obtaining compliance qualifications is Kraken's top priority. In March 2025, the company acquired trading platform NinjaTrader for $1.5 billion, securing a CFTC FCM license and onboarding 20,000 retail traders. In April 2026, it acquired Bitnomial for $550 million. After a decade of operation, Bitnomial was the only native crypto platform to hold all three core CFTC licenses: Designated Contract Market (DCM), Derivatives Clearing Organization (DCO), and FCM. In March 2026, Kraken successfully secured a Federal Reserve master account. In May of the same year, it submitted an application to the Office of the Comptroller of the Currency (OCC) for a National Trust Bank charter.

While aggressively pursuing compliance, Kraken hasn't neglected the on-chain ecosystem. The platform launched its proprietary Layer 2 network, Ink, in December 2024, subsequently building the lending protocol Tydro and the decentralized perpetual exchange Nado on top of it. It launched the on-chain wealth management product DeFi Earn in January 2026 and the Bitcoin custody service Bitcoin Vault in May. The design logic behind all on-chain products revolves around assets whose value can be clearly articulated to institutional clients; altcoins are also not part of its on-chain business roadmap.

While other exchanges rush to list stock trading to retain users, Kraken has chosen a different path, aiming to become a trusted, native crypto bank for institutional clients.

Although the specific strategies of each centralized exchange differ, they share a commonality: altcoins no longer hold a significant place in the future plans of any platform.

Where is the Crypto Industry Heading?

For a long time, centralized exchanges have been the liquidity backbone of the crypto ecosystem. Exchanges list tokens, driving trading activity, and the vast majority of crypto projects have relied on this support to survive.

The deep-seated industry problem is that almost no crypto project can prove its true value through actual business revenue. The logic supporting token prices has never been the project's fundamentals, but rather early-stage user acquisition tactics like exchange listings and liquidity mining. This operational model can only be sustained as long as exchanges and traders remain enthusiastic about the crypto track.

With retail trading volume continuously shrinking and the hype fading, exchanges' listing support and marketing resources will also tighten. The original ecosystem model is inevitably unsustainable in the long run.

Market trends have shifted. Capital is flowing towards projects that can generate value through revenue from real-world products, rather than tokens that solely depend on exchange support. Hyperliquid's platform token, HYPE, is a prime example. Even though this platform diverted on-chain liquidity originally belonging to cryptocurrencies towards stock categories, HYPE remains one of the best-performing crypto assets currently. This phenomenon also signifies the gradual unraveling of the once mutually beneficial symbiotic relationship between centralized exchanges and crypto projects.

The strategic choices of major exchanges confirm this trend. Retail trading volume and user base are the lifeblood of exchanges. If they stubbornly cling to the pure cryptocurrency trading track, this foundation will only erode further. The market has long lost its former enthusiasm for newly listed crypto tokens. Exchanges have no choice but to actively cultivate new revenue streams while protecting their existing platform architecture and user base.