Dragonfly Strategic Investment of $10 Million in Crypto Derivatives Exchange Bitget in April 2023
In April 2023, crypto venture capital firm Dragonfly announced a strategic investment of $10 million in crypto derivatives exchange Bitget. Dragonfly Managing Partner Haseeb Qureshi stated that Bitget is making crypto assets more accessible to the public through innovative derivatives products and user-centric strategies. This investment occurred less than six months after the collapse of FTX.
At the time of the investment, Bitget had over 8 million users across more than 100 countries. Founded in 2018 and registered in Seychelles, Bitget's main markets are in Asia, Latin America, and Europe. According to CoinGecko data, it ranks fifth globally in both open interest and trading volume among derivatives exchanges, with a 24-hour open interest of approximately $2.4 billion; Boston Consulting Group listed it as one of the top three crypto derivatives exchanges in July 2022.
Copy trading is Bitget's differentiated product. As of February 2023, over 80,000 traders were publicly sharing strategies on the platform, with more than 380,000 users following their trades, making Bitget claim to be the world's largest crypto copy trading platform. In terms of brand marketing, it has signed Argentine star Lionel Messi, Italy's Juventus Football Club, and esports event organizer PGL.
The funds will be used to expand spot trading, financial products, and new coin issuance platforms, as well as global marketing and crypto education projects, aiming to transform into a "one-stop crypto investment platform." A month prior, Bitget completed the acquisition of crypto wallet BitKeep and added a $30 million investment; BitKeep had 9.5 million users at the time and claimed to be Asia's largest crypto wallet. Bitget Managing Director Gracy Chen stated that the industry insights brought by Dragonfly are more valuable to the company than the funds.
Market mechanisms indicate this is part of the reshuffling of the derivatives market following the collapse of FTX. In November 2022, FTX's bankruptcy released about 25% of Ethereum futures positions, with Binance subsequently acquiring about 40% of Ethereum futures market share; in March 2023, the U.S. Commodity Futures Trading Commission sued Binance. The remaining market share became a target for second-tier exchanges, with funds flowing from the collapsed FTX and the regulated Binance to offshore derivatives platforms like Bitget, Bybit, and OKX. Beneficiaries are the second-tier exchanges that are accommodating user migration and the venture capital betting on them; the pressured parties are the leading platforms facing U.S. enforcement and retail investors bearing high leverage risks on such platforms.
Supplementary data: By 2025, Bitget aims to have over 120 million global users, with annual derivatives trading volume reaching $81.7 trillion, averaging $6.803 trillion monthly, placing its derivatives trading scale among the top four centralized exchanges globally. The proportion of institutions in its spot trading rose from 39% at the beginning of the year to 82% by year-end, while in futures trading, it increased from 3% to 60%. The user protection fund is expected to reach a peak of $741 million by October 2025.
Source: Public Information
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Dragonfly is a crypto venture capital firm with dual roots in the U.S. and China, founded in 2018 by Bo Feng and Alex Pack. Bo Feng was previously a co-founder of Pantera Capital and has deep connections in the Chinese market. Haseeb Qureshi was a partner at MetaStable Capital and is one of the most well-known investors and commentators in the crypto space. Dragonfly has invested in a range of trading infrastructure and DeFi projects, establishing an early presence in the Asian exchange ecosystem. Bitget itself has a tumultuous history: the acquired BitKeep suffered an attack in December 2022, losing about $8 million; in 2025, Bitget rolled back some trades due to abnormal price fluctuations of the VOXEL token, causing user disputes.
The capital path is clear: exchanging a relatively small venture capital investment for endorsement. $10 million is insignificant for an exchange with daily trading volumes in the billions; the real value lies in the brand credibility of a top U.S. crypto venture capital firm. After the collapse of FTX, exchanges are in dire need of trust, and Bitget promptly published reserve proofs and established a user protection fund worth hundreds of millions, along with acquiring a wallet and signing Messi, creating a narrative that packages "safety" and "mainstreaming" for customer acquisition. The venture capital firms are betting on the exchange's cash flow and the valuation leverage provided by the platform token BGB.
The most direct analogy is the rise of Binance. In 2017, when China fully banned crypto trading, Binance seized the opportunity to leap from a new exchange to the world's number one; after the collapse of FTX in 2022, second-tier exchanges replicated the same path, capturing the market share left vacant by the leading players. In November 2023, Binance reached a $4.3 billion settlement with the U.S. Department of Justice, and founder Changpeng Zhao pleaded guilty and served four months in prison, further pushing users toward second-tier platforms due to regulatory discounts on leading platforms. Offshore derivatives exchanges are currently in a phase of "top-tier reshuffling and institutionalization": the rapid increase in institutional trading at Bitget indicates a shift from retail gambling to a marketplace dominated by market makers and quantitative institutions.
Essentially, this is capital concentration. Derivatives exchanges exhibit a strong liquidity network effect: the better the market depth, the lower the slippage, which attracts large traders and market makers, who further deepen the market, leading to concentration of market share among a few platforms. Events like the collapse of FTX serve as a unique window for market share redistribution; whoever can capture users during this window with capital, endorsement, and marketing can enter a new concentrated landscape. The revenue of exchanges comes from transaction fees, funding rates, and platform tokens; in a leveraged market, users may face liquidation, while the platform only collects tolls, and this asymmetry is the reason for continuous capital inflow.
ABAB News · Cognitive Law
- The place where giants fall is the starting point for the second place.
- Liquidity attracts liquidity; depth is the moat.
- In a leveraged market, the platform is the only player that does not face liquidation.