SGX’s bitcoin and ether perpetual futures have become increasingly popular since their debut two weeks ago, and that growth represents new liquidity rather than cash diverted from elsewhere, said Michael Syn, president of the Singapore Exchange holding company.
The products, cryptocurrency derivatives that allow institutional traders to speculate on the price of an asset without an expiration date, traded nearly 2,000 lots on Nov. 24, representing about $32 million in nominal value. It has crept up to $250 million in cumulative trade so far.
The key to the exchange is that volume appears to be new money flowing into the system, not funds derived from alternative investments or other exchanges. Futures build liquidity and price discovery incrementally, not by drawing volume from rival desks such as over-the-counter trading.
“Like rupee/CNH futures launches, it creates new markets without killing OTC,” Syn said in an interview, adding that early volume trends point to interest from institutional-grade hedge funds experienced in futures, along with active participation from crypto-native players.
Perpetuals, or perps, allow investors to bet on the future price of an asset without the hassle of having to roll over their positions when the future expires. The strategy has been popular among crypto traders for years, but the lack of regulated markets, especially in Asia, kept institutions on the sidelines.
“We are targeting a parent contract in the Asian time zone,” Syn said.
In other words, the exchange aims to establish its BTC/ETH perps as the benchmark contract in Asian trading hours, representing a go-to reference for pricing, settlement and liquidity in the time zone.
Institutions chase arbitrage
Syn said the perpetual products were introduced to meet increasing 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 spot/ETFs and hedging with futures. Up to 90% of Bitcoin ETF interest is basis traders, not outright longs,” Syn told CoinDesk. “Clients want short-term offenders on a regulated exchange like SGX, not noisy 90-day futures.”
The basis trade is a bi-legged strategy to pocket the price difference between spot and futures/perpetual futures prices by simultaneously buying the cryptocurrency (or the appropriate ETF) on the spot market and selling futures.
Arbitrage has been popular among crypto-native traders for years – perps were invented by BitMEX around 11 years ago, but the lack of regulated perpetual futures markets, especially in Asia, kept institutions on the sidelines.
Now SGX is looking for institutional participation to increase, saying its compliant contracts provide a reliable venue to execute basis trades without offshore risks.
Risk management
Futures remain among the most popular crypto products. Yet they have become controversial since the Oct. 8 crash, where platforms like Hyperliquid, a decentralized exchange (DEX) for perpetual futures, auto-deleveraged positions, wiped out profitable bets and socialized losses to protect exchanges.
One theory posits that basis traders who saw their short futures legs auto-deleverage on October 8 became sellers in the spot market, contributing to the November price decline.
SGX said its regulated perps employ various risk management practices.
“There are no high-leverage auto-liquidations here – it’s an OTC structure without proper clearing. We margin conservatively, with brokers filling up on behalf of clients,” Syn explained.
“Positions remain stable for basis trades (long $1 spot = short $1 perpetual), a model long proven in the Treasury and FX basis 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 trust with BTC and ETH perps before expanding.
Options, he noted, require deep underlying liquidity to operate effectively, while client interest is also emerging 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 executing the core contracts successfully.
