Inside Binance's Rush Towards Gold and Oil: Are Whales Preparing for a Crypto Shock?

Binance

Gold (XAU) and silver (XAG) futures have surged into the top five by trading volume on Binance Futures.

Binance's Move into Metals

Just a few weeks after introducing gold and silver perpetual futures settled in USDT, Binance has seen a significant increase in trading activity within these metal contracts, amassing tens of billions of dollars in cumulative volume according to a report from CryptoQuant.

Despite this rapid growth in non-crypto assets, CryptoQuant analyst Marteen emphasizes that Binance remains primarily focused on cryptocurrencies. Bitcoin currently dominates futures trading with volumes around the low $20 billion range, followed closely by Ethereum at $18.1 billion and Solana at a distant third with $3.0 billion. However, the emerging interest in metals shows that they are now a significant part of the market. Gold has reached 4th place with $2.15 billion, while silver closely trails at $1.98 billion.

Marteen concludes that while Binance maintains its crypto-centric identity, it has expanded beyond being just a cryptocurrency exchange. The quick uptake of metals trading demonstrates a growing appetite for commodities, and equity-linked products are beginning to garner attention too.

binance

According to WuBlockchain, Binance’s new “TradFi” futures suite, which includes gold, silver, and stock-linked products, is rapidly gaining traction in overall derivatives trading activity on the platform.

On April 2, the very first full trading day after the launch, USDⓈ-margined perpetual contracts for crude oil assets CL and BZ reached trading volumes of $760 million and $358 million, placing them third and fourth amongst Binance TradFi perpetual products.

binance

Despite the positive trends in crude oil, gold (XAU) and silver (XAG) remain at the forefront, contributing a combined daily volume of $5.58 billion, which accounts for over 70% of total trades.

It’s important to note that Binance is not the only platform witnessing this shift in trading behavior. Recently, Hyperliquid has attracted attention for the notable influence of tokenized commodities, where the combined open interest for oil, gold, and silver futures achieved record highs. This exchange is now processing higher volumes in tokenized commodities than in digital assets. Just yesterday, NewsBTC reported that tokenized Brent oil futures on Hyperliquid resulted in approximately $46.6 million in liquidations over 24 hours, positioning oil as the third-most liquidated asset on this decentralized platform.

Gold, XAU, XAUSDT

Both gold and silver are experiencing increased prices due to concerns about inflation, expectations of interest rate cuts, and geopolitical tensions. By providing opportunities for traders to express these macroeconomic perspectives with high leverage and stablecoin collateral, Binance is aligning itself with the 24/7 real-world asset trading trend rather than traditional commodity exchanges.

The ascent of gold and silver into Binance Futures’ top five signifies that the divide between cryptocurrency and traditional finance (TradFi) markets is diminishing. This shift allows liquidity, speculation, and hedging activities to operate more fluidly in the same trading environment.

As more derivatives capital flows into metals and stock-linked products, it may thin order books and increase volatility within smaller altcoins during periods of risk aversion.

Silver, XAG, XAGUSDT

Traders with sophisticated strategies may now utilize the metals futures available on Binance to hedge against potential downturns in the crypto market. As correlations between Bitcoin and gold (or oil and Bitcoin, as recently reported by NewsBTC) could evolve with both trading on the same platform, failure to acknowledge this new macroeconomic landscape on Binance’s futures offerings may overlook crucial indicators of where smart money is heading.

Bitcoin, BTC, BTCUSD

Key Takeaways:

Binance's new gold and silver futures have rapidly gained volume, placing them among the top trading products.
Bitcoin and Ethereum continue to dominate cryptocurrency trading, but metals like gold and silver are becoming increasingly significant.
The integration of commodities into Binance signifies a shift in the cryptocurrency market towards more traditional financial assets.
Other platforms, like Hyperliquid, are also seeing increased activity in tokenized commodities.
This development presents new trading opportunities and potential risks in the crypto market.

Cover image from Perplexity. All charts from TradingView.