Binance Executive Says Traditional Hedge Funds Are Actively Exploring Arbitrage on Crypto Venues

Hedge funds move from curiosity to active interest in crypto trading

Catherine Chen, head of VIP and institutional business at Binance, said traditional hedge funds are no longer just watching crypto markets from the sidelines — many are now actively exploring trading opportunities on crypto platforms. The interest is driven largely by arbitrage possibilities between traditional finance instruments and their equivalents on crypto venues.

Chen made the remarks during an interview with The Block at Token2049, a major industry conference. She described the shift as a move beyond passive curiosity toward concrete engagement, though she emphasized the trend is still in its early stages.

Key numbers from the interview

• Traditional hedge funds that were previously only curious are now actively inquiring about trading on crypto platforms.
• Cash-equity assets under management on Binance grew from roughly $800–900 million to about $1.4 billion.
• TradFi perpetual futures volume on Binance rose from around $20–30 billion per month at launch early this year to roughly $400 billion every 30 days.
• Chen expects meaningful movement in the next 12 to 18 months rather than an immediate surge.

What draws hedge funds to crypto venues

Chen cited three practical reasons why the arbitrage opportunities have become more relevant: improved market depth on major crypto exchanges, continuous 24/7 trading, and the ability to discover prices on weekends when traditional markets are closed.

She also noted that when similar instruments were offered on second- or third-tier venues or on decentralized finance (DeFi) platforms — which operate without a central intermediary — liquidity was often too thin for hedge funds to trade meaningfully.

Crypto-native investors building hybrid portfolios

The same trend is visible in the other direction, according to Chen. Crypto-native clients — traders who started in the crypto space — are now incorporating more traditional finance instruments into their portfolios. Chen described these traders as less active in traditional markets historically, but increasingly willing to cross over and trade both sides.

Early stage and no single standard yet

Chen stressed that tokenization and cross-asset trading remain at an early stage. There is currently no single standard that governs how traders and institutions approach these products, and practices vary widely across venues.

Regulatory clarity seen as the key variable

When asked what might shape the convergence of traditional and crypto-native trading, Chen pointed to regulation rather than any single exchange's product lineup. She suggested that a clear regulatory framework would help things fall into place more broadly across the market.

Confirmed facts and remaining uncertainty

What is confirmed: Chen's statements were made publicly during an interview with The Block at Token2049. The volume figures she cited come from Binance data as presented in that interview. The growing interest from hedge funds is Chen's account of what her team is seeing on the ground.

What remains unclear: There is no independent third-party data in the supplied material to corroborate the volume figures or the level of hedge fund interest. Chen herself described the engagement as early-stage and did not expect an immediate surge, framing the next 12 to 18 months as the relevant watch window.

Sources

• The Block