SGX Bitcoin and ether Perpetual futures 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, 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, saw nearly 2,000 lots traded on Nov. 24, representing around $32 million in notional value. So far, that figure has risen to $250 million in accumulated operations.
The key to the exchange is that the volume appears to be new money flowing into the system, not funds diverted from alternative investments or other exchanges. Futures are generating liquidity and price discovery incrementally, not extracting volume from rival desks like over-the-counter trading.
“Like the rupee/CNH futures launches, it creates new markets without killing the OTC,” Syn said in an interview, adding that early volume trends point to interest from institutional-level hedge funds with experience in futures, along with active participation from crypto-native players.
Perpetuals, or delinquents, 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 cryptocurrency traders for years, but the lack of regulated markets, especially in Asia, kept institutions on the sidelines.
“We are targeting a mother contract in the Asian time zone,” Syn said.
In other words, the exchange aims to set its BTC/ETH rates as the reference contract during Asian trading hours, representing a reference for pricing, settlement, and liquidity in the time zone.
Institutions pursue 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 now is in basis trading: buying spot/ETF and then hedging with futures. Up to 90% of interest in Bitcoin ETFs are basis traders, not long positions,” Syn told CoinDesk. “Clients want short-term offenders on a regulated exchange like SGX, not noisy 90-day futures.”
Base trading is a two-leg strategy to pocket the price difference between spot prices and futures/perpetual futures prices by simultaneously purchasing the cryptocurrency (or the appropriate ETF) in the spot market and selling futures.
Arbitrage has been popular among crypto-native traders for years – BitMEX invented the felons about 11 years ago – but the lack of regulated perpetual futures markets, especially in Asia, kept institutions on the sidelines.
Now SGX is seeking institutional participation to increase, saying its compliant contracts provide a reliable place to execute core operations without offshore risks.
Risk management
Futures remain among the most popular crypto products. Still, they have become controversial since the October 8 crash, when platforms like Hyperliquid, a decentralized exchange (DEX) for perpetual futures, automatically deleveraged their positions, eliminated profitable bets and socialized losses to protect the exchanges.
One theory holds that basis traders, who saw their short futures legs automatically deleveraged on October 8, became sellers in the spot market, contributing to the price decline seen in November.
SGX said its regulated criminals employ different risk management practices.
“There are no high-leverage automatic settlements here; that’s an OTC build without proper clearing. We manage margins conservatively, and brokers complete on behalf of clients,” Syn explained.
“Positions remain stable for basis trading (long $1 spot = short $1 perpetual), a long-proven model in the treasury and foreign exchange markets.”
When asked about plans for additional products, such as options or perpetual altcoins, Syn emphasized that the immediate priority is to build liquidity and confidence in BTC and ETH offenders before expanding.
Options, he noted, require deep underlying liquidity to function effectively, while client interest is also surging in the S&P 500 and perpetual interest rates. The broader product roadmap, he added, reflects what is currently available in unregulated markets, but for now, the focus remains firmly on successful execution of core contracts.
