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Markets opened the year with subtle but important shifts. BTC outperformed both equities and gold, higher beta crypto narratives reawakened, and derivatives positioning pointed to a careful rebuild of risk rather than excess. In today’s note, we break down index performance, what ETH derivatives are signaling under the surface, and the growing case for equity perps as a retail driven product nearing an inflection point.
Indices
BTC quietly stole the show this week, benefiting from a rare but timely negative correlation to both equities and gold. Traditional markets softened, with the Nasdaq 100 (-1.7%) and S&P 500 (-1.1%) drifting lower while gold sold off sharply (-3%), BTC (+3.7%) ground higher. It was a steady, low-drama move that stood out precisely because of how long it’s been since crypto outperformed across both risk and defensive assets in the same window. The week felt less like speculative exuberance and more like BTC reminding the market of its role as a portfolio diversifier, a dynamic largely absent through much of the past year when correlations repeatedly snapped back toward one. Whether that decoupling persists will likely hinge on macro follow-through, but for now, BTC’s ability to outperform both stocks and gold marks a notable shift in tape behavior worth watching.
Last week’s winners were concentrated almost entirely in the higher-beta, most narrative-driven corners of crypto, signaling a shift toward speculative positioning. Launchpad tokens (+27.8%) led by a wide margin, benefiting from renewed retail participation and a resurgence in short-duration token launches as traders chased velocity over fundamentals. Modular (+21.0%) and AI (+19.4%) followed closely, while DePIN (+18.9%) and the Solana ecosystem (+16.1%) also stood out.
Within our Launchpad index, leadership once again belonged to MetaDAO, which extended its run of relative outperformance and reinforced its status as the bellwether for the sector. META’s sharp gains this week reflected renewed interest in token issuance infrastructure, as traders gravitated toward platforms most levered to new launches and velocity-driven flows.
What stood out just as much was the breadth: Nearly every constituent in the index finished higher on the week, underscoring how synchronized the move was across the complex. The lone exception was Launchcoin, which lagged while the rest of the cohort participated in the upside. That kind of near-universal participation is typically a sign of sector-level positioning rather than idiosyncratic token news. Looking ahead, the setup remains compelling, with regulatory frameworks expected to crystallize in 2026 and compliant launch infrastructure likely to move from a speculative niche to a structural pillar of the crypto stack, making Launchpads an area investors will be increasingly forced to pay attention to rather than trade opportunistically.
Market Update
ETH derivatives markets in December 2025 were defined by a clear divergence between participation and positioning. Perpetual futures volumes continued to cool, with aggregate ETH perps volume falling roughly 31% month over month, extending November’s decline and reflecting fading speculative intensity amid consolidation and compressed volatility. Activity fell broadly across major venues, signaling reduced appetite for short-term directional trading, particularly during thinner holiday liquidity.
Despite this pullback in turnover, open interest rebounded sharply. Average ETH open interest rose approximately 63% over the month, reversing November’s contraction and climbing steadily as price action stabilized. The combination of falling volumes and rising OI suggest that exposure was rebuilt quietly and deliberately, pointing to longer-horizon or relative-value positioning rather than aggressive leverage-chasing.
This measured rebuild in positioning was reinforced by a continued decline in liquidation activity. ETH liquidations remained subdued throughout December, with weekly liquidation volumes down 56% from November and well below October’s forced deleveraging extremes. Both sides of the market stayed relatively contained as prices consolidated, with short liquidations still modestly exceeding longs but at significantly lower absolute levels. The absence of large liquidation cascades alongside rising open interest underscores a healthier leverage profile, where positions were added gradually and risk was managed more tightly.
Taken together, declining volumes, rising open interest and falling liquidations characterize December as a period of risk reduction and positioning reset, rather than a return to speculative excess.
The bull case for equity perps
Equity perpetuals are often framed as a crypto-native attempt to bring traditional markets onchain. In reality, their real competition is not options but leveraged ETFs, a product class that already has massive retail adoption. The appeal is simple. Retail investors increasingly want leverage in a clean and intuitive wrapper.
JPMorgan estimates retail equity flows in 2025 are over 50% higher than 2024 and above the meme stock peak of 2021. Leveraged ETFs have absorbed much of this appetite, with AUM growing from $41.6 billion in 2020 to $250 billion by late 2025, and monthly trading volumes exceeding $800 billion.
Source: Bloomberg
But leveraged ETFs are flawed: They rely on derivatives to reset exposure daily, which introduces volatility drag. Even when the underlying index goes nowhere, leveraged ETFs can lose value over time. These products are designed for short-term trading but are widely misunderstood and held longer than intended.
Equity perps fix this. They provide constant notional exposure without daily resets, meaning leverage does not decay mechanically. Volatility does not compound against the trader in the same way. For anyone seeking leveraged directional exposure, equity perps are simply a cleaner instrument.
Early traction supports this view. Since mid-October, equity perp volume on Hyperliquid has reached roughly $12.9 billion, with daily volumes commonly found between $200 million and $300 million. Hyperliquid currently dominates market share, followed by Lighter.
Accessibility matters here. It’s no coincidence that equity perp volume has emerged on the same onchain venues that dominate crypto perps.
Source: Hyperzap
But there are frictions. When equity markets are closed, market makers cannot hedge, liquidity thins, and funding rates can spike. Platforms manage this differently through restricted trading hours or internal oracle adjustments. These issues explain why adoption has grown steadily rather than explosively.
The long-term winners will not be determined by venue design but by distribution. Just as centralized exchanges dominate crypto perps, equity perps will likely scale through platforms with massive retail reach. Robinhood and Coinbase are best positioned.
Source: The BlockBoth have already taken steps toward tokenized equities, and a compliant version of equity perps could emerge as early as 2026. The opportunity is large; leveraged ETFs currently trade between $800 billion and $900 billion per month. Capturing even 5% of those flows would increase trading volumes by an estimated 17% for Robinhood and nearly 70% for Coinbase. Ultimately, equity perps are not a crypto experiment. They are a retail product waiting for the right distribution channel.
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Source: https://blockworks.co/news/eth-derivatives-reset
