Binance VIP head says hedge funds are actively exploring arbitrage opportunities on crypto venues

Traditional hedge funds are showing more active interest in trading on crypto venues, drawn by arbitrage opportunities and round-the-clock liquidity, according to Catherine Chen, head of VIP and institutional at Binance. Speaking to The Block at Token2049, Chen said firms that had previously only been curious are now actively exploring the space, particularly arbitrage strategies that link traditional finance instruments available on crypto platforms, such as cash equities and perpetual futures.

Chen pointed to better market depth as a key enabler, alongside crypto's 24/7 trading schedule and weekend price discovery. Those features, she said, have made cross-venue opportunities more practical to pursue. When the same instruments are listed on second- or third-tier exchanges or on DeFi platforms, liquidity is often too thin for hedge funds to execute at the size they need, she added.

Growth in TradFi instruments, from a low base

Chen cautioned that the engagement remains at an early stage and that she does not expect institutional flows to accelerate overnight. "Oftentimes, once we start seeing these clues, this is when I would really watch the movement in the next 12 to 18 months," she said.

The trend is running in both directions, according to Chen. Crypto-native clients are adding instruments tied to traditional products to construct hybrid portfolios, even though they tend to be less active in conventional markets. "They still feel that it's something that they can cross, and start becoming more active," she said.

Volume figures cited in the interview show fast growth for TradFi-linked products on Binance, though from a modest base relative to established markets. Cash-equity assets under management on the platform rose from roughly $800-900 million to $1.4 billion, Chen said, while TradFi perpetual futures volume climbed from about $20-30 billion per month when the products launched at the start of this year to around $400 billion per 30-day period.

Chen also noted that tokenization and cross-asset trading remain immature, with no single standard yet adopted by traders and institutions. Regulatory clarity, she suggested, will be a bigger factor than any individual venue's product lineup in determining how traditional and crypto-native trading converge. "Once a regulator comes out with a golden framework, then things just fall into place," she said.