Dragonfly Capital has invested $10 million in cryptocurrency derivatives exchange Bitget, the San Francisco-based venture capital firm announced on April 4. The funds will be used to support Bitget’s ongoing global market and service expansion and upcoming corporate social responsibility initiatives directed at crypto education and adoption.
Bitget disclosed that since its inception in 2018, the exchange has grown to comprise over 80,000 traders and 380,000 copy traders, or individuals that sync their trading positions with that of traders using automation. For its 2023 roadmap, Bitget plans to expand its spot trading, launchpad and Bitget Earn products.
Dragonfly has invested in prominent blockchain firms such as Matter Labs, 1inch and Polygon. The firm had a reported $3 billion in assets under management in 2022. Cryptocurrency derivatives exchanges were negatively impacted by the collapse of FTX in November. At that time, the exchange facilitated $6.6 billion in contracts per day in trading volume and had an open interest of $5.1 billion.
Since FTX's downfall, central exchanges’ open interest has recovered to approximately $68.5 billion at the time of publication, compared to an estimated $60.1 billion at its nadir in December 2022, according to data from Coinmarketcap and CoinGecko.
While markets have stabilized from the worst of the FTX collapse, the crypto industry still faces issues, such as the recent Commodity Futures Trading Commission lawsuit against Binance. The CFTC alleges that Binance onboarded an estimated 2.8 million U.S. customers without registering with the regulator. Interestingly, since it is the onus of the seller to perform due diligence checks before onboarding potential customers in the U.S., it is unlikely that alleged users themselves could face the consequences of finding their way onto the exchange.