Bitcoin from SGX and ether Perpetual futures contracts have become increasingly popular since their debut two weeks ago, and that growth represents new liquidity rather than cash redirected from elsewhere, said Michael Syn, chairman of the Singapore Stock Exchange Holding Company.
The products, cryptocurrency derivatives that allow institutional traders to speculate on the price of an asset without an expiration date, saw nearly 2,000 lots traded on November 24, representing approximately $32 million in notional value. This represents $250 million in cumulative transactions so far.
The key to the exchange is that the volume appears to be new money entering the system, not funds diverted from alternative investments or other exchanges. Futures contracts gradually build liquidity and price discovery, without extracting volume from competing desks such as over-the-counter trading.
“Like the rupee/CNH futures launches, this creates new markets without killing OTC,” Syn said in an interview, adding that early volume trends highlight the interest of institutional-grade hedge funds experienced in futures, as well as the active participation of crypto-native players.
Perpetuals, or perps, allow investors to bet on the future price of an asset without having to roll over their positions when the future expires. The strategy has been popular with crypto traders for years, but the lack of regulated markets, particularly in Asia, has kept institutions away.
“We are aiming for a mother contract based on the Asian time zone,” Syn said.
In other words, the exchange aims to establish its BTC/ETH contracts as the reference contract during trading hours in Asia, representing a go-to benchmark for pricing, settlement and liquidity in the time zone.
Institutions run after arbitration
Syn said perpetual products were introduced to meet growing institutional demand for regulated contracts for basis trading, also known as cash-and-carry arbitrage.
“It starts with the voice of the customer… Institutional interest is now in basis trading: buying ETFs spot, then hedging with futures. Up to 90% of interest in Bitcoin ETFs comes from basis traders, not outright purchases,” Syn told CoinDesk. “Clients want short-term perps on a regulated exchange like SGX, not noisy 90-day futures.”
Basis trading is a two-pronged strategy for pocketing the price difference between spot prices and futures/perpetual futures prices by simultaneously purchasing the cryptocurrency (or appropriate ETF) in the spot market and selling futures contracts.
Arbitrage has been popular among crypto-native traders for years – kinks were invented by BitMEX about 11 years ago, but the lack of regulated perpetual futures markets, particularly in Asia, has kept institutions away.
SGX is now seeking increased institutional participation, saying its compliant contracts provide a reliable venue to execute basic transactions without offshore risks.
Risk management
Futures contracts remain among the most popular crypto products. Yet they have become controversial since the October 8 crash, when platforms like Hyperliquid, a decentralized exchange (DEX) for perpetual futures, automatically reduced their positions, erasing profitable bets and socializing losses to protect exchanges.
One theory is that basic traders, who saw their short futures positions automatically deleveraged on October 8, became short in the spot market, contributing to the price drop seen in November.
SGX said its regulated agents employ different risk management practices.
“There is no high-leverage reverse liquidation here – it’s an over-the-counter construct without proper clearing. We mark conservatively, with brokers completing on behalf of clients,” Syn explained.
“Positions remain stable for basic trades ($1 spot buyer = $1 perpetual seller), a long-proven model in the basic Treasury and FX markets.”
When asked about plans for additional products, such as options or altcoin perpetuals, Syn emphasized that the immediate priority is to build liquidity and confidence in BTC and ETH players before expanding.
Options, he noted, require significant underlying liquidity to operate effectively, while client interest is also building in the S&P 500 and interest-rate perpetuals. The broader product roadmap, he added, reflects what is currently available in unregulated markets, but for now the focus remains firmly on the successful execution of prime contracts.
