According to SGX’s President, New Capital Flows Into Crypto Futures Rather Than Existing Cash Being Shifted.

SGX’s Bitcoin and Ether Perpetual Futures Draw New Liquidity, Target Institutional Traders

SGX’s bitcoin and ether perpetual futures have seen strong adoption since their debut two weeks ago, drawing fresh liquidity rather than shifting funds from other markets, according to Michael Syn, president of the SGX Group.

These cryptocurrency derivatives, which allow traders to speculate on asset prices without an expiration date, recorded nearly 2,000 lots traded on Nov. 24, roughly $32 million in notional value. Overall trading has climbed to about $250 million in cumulative volume.

Syn emphasized that the activity represents new capital entering the market, not a reallocation from other exchanges or investment avenues. “Like our rupee/CNH futures launches, this creates new markets without displacing OTC volumes,” he said. Early engagement comes from institutional hedge funds familiar with futures, alongside crypto-native traders.

Perpetuals Make Crypto Trading More Accessible to Institutions

Perpetual futures, or perps, allow investors to bet on an asset’s future price without rolling over contracts. While widely used by crypto traders, the absence of regulated Asian markets limited institutional participation. SGX aims to change that by establishing its BTC and ETH perps as the benchmark contracts for Asian trading hours.

Meeting Institutional Demand for Arbitrage

The products cater to rising institutional demand for regulated vehicles to conduct basis trading, or cash-and-carry arbitrage. “Up to 90% of Bitcoin ETF interest comes from basis traders, not outright longs,” Syn said. Basis trading involves buying crypto (or ETFs) in the spot market while selling futures to profit from price differences.

Previously, the lack of regulated perps in Asia kept institutions on the sidelines. SGX’s compliant contracts provide a trusted venue for executing these trades without offshore risk.

Risk Management and Market Stability

Futures trading has faced scrutiny following the Oct. 8 crypto crash, when some platforms auto-deleveraged positions, wiping out gains and socializing losses. SGX employs a different framework. “There are no high-leverage auto-liquidations here,” Syn explained. “We margin conservatively, with brokers topping up client accounts. Basis trade positions remain steady, similar to treasury and FX markets.”

Looking Ahead

While SGX may explore options or altcoin perps in the future, its current focus is on building liquidity and trust in BTC and ETH perps. Client interest is also emerging in S&P 500 and interest-rate perps, but the exchange is prioritizing execution of its core contracts before expanding further.