Singapore Exchange’s derivatives arm announced it will launch bitcoin and ether perpetual futures on November 24. The contracts will be available exclusively to accredited and institutional investors. SGX said the new offering combines the institutional framework of global derivatives with the flexibility of popular crypto instruments.
Perpetual futures are derivatives without an expiry date, enabling traders to maintain positions indefinitely. They allow leveraged exposure to crypto assets while avoiding the operational pressure of contract rollovers common in traditional futures. SGX’s contracts reference the iEdge CoinDesk Crypto Indices, widely recognized benchmarks for price discovery in institutional markets.
SGX Bitcoin Ether Perpetual Futures: A New Opportunity for Institutions
Perpetual futures are currently among the most traded instruments on the global crypto market, with over $187 billion in daily average volumes. These contracts tend to work 24 hours on offshore locations. SGX is striving to offer an onshore alternative in a regulated model with marketing and clearing policies in derivatives akin to traditional derivatives.
The contracts pursue a funding rate mechanism in order to maintain contract price in close relationship with prices of underlying assets. The indexes being used as benchmarks offer real-time monitoring of bitcoin and ether, which ensures that they are in line with major exchanges. This will provide institutional players with an objective and consistent reference on which to trade.
How SGX’s Bitcoin Ether Futures Benefit Institutional Traders
The introduction of SGX has been embraced by major financial institutions such as DBS Bank and OKX. They emphasized that perpetual futures allow institutions to acquire crypto exposure without possessing the underlying assets. This also helps in efficient portfolio management and hedging risk as opposed to spot trading.
Michael Syn, president of SGX Group, highlighted that the launch is indicative of the increased adoption of digital assets in institutional portfolios. He stated that the framework of SGX is bringing about the same discipline that is applied in the traditional markets into crypto trading. The relocation makes Singapore a regional market of institutionalized crypto derivatives.
The contracts’ availability to accredited investors aligns with Singapore’s cautious regulatory stance while supporting fintech innovation. Analysts are hopeful that perpetual futures will be introduced onshore, which will increase institutional crypto markets transparency and trust.