Bitcoin (BTC) and Ether (ETH) Perps Are Building Liquidity Incrementally: SGX’s Syn

SGX’s bitcoin BTC$90,220.44 and ether ETH$3,108.25 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 about $32 million in notional value. That’s crept up to $250 million in cumulative trading so far.

Key for the exchange is the volume seems to be new money flowing into the system, not funds diverted from alternative investments or other exchanges. The futures are building liquidity and price discovery incrementally, not by pulling 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 interest from institutional-grade hedge funds experienced with futures, alongside 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 with crypto traders for years, but the lack of regulated markets, especially in Asia, kept institutions on the sidelines.

“We are targeting an Asian-time-zone mother contract,” Syn said.

In other words, the exchange aims to establish its BTC/ETH perps as the benchmark contract during Asian trading hours, representing a go-to reference for pricing, settlement and liquidity in the time zone.

Institutions are chasing arbitrage

Syn said the perpetual products were introduced to meet mounting institutional demand for regulated contracts for basis trading, also known as cash-and-carry arbitrage.

“It begins with the voice of the customer … Institutional interest is now in basis trading— buying spot/ETFs then hedging with futures. Up to 90% of Bitcoin ETF interest is basis traders, not outright longs,” Syn told CoinDesk. “Customers want short-dated perps 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) in the spot market and selling futures.

The arbitrage has been popular among crypto-native traders for years — perps were invented by BitMEX about 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 ramp up, saying its compliant contracts provide a trusted venue to execute basis trades without offshore risks.

Risk management

Futures remain among the most popular crypto products. Still, they’ve grown controversial since the Oct. 8 crash, when platforms like Hyperliquid, a decentralized exchange (DEX) for perpetual futures, auto-deleveraged positions, wiping out profitable bets and socializing losses to protect exchanges.

One theory holds that basis traders, who saw their short futures legs auto-deleveraged on Oct. 8, became sellers in the spot market, contributing to the price slide seen in November.

SGX said its regulated perps employ different risk-management practices.

“There are no high-leverage auto-liquidations here — that’s an OTC construct without proper clearing. We margin conservatively, with brokers topping up on behalf of clients,” Syn explained.

“Positions remain steady for basis trades (long $1 spot = short $1 perpetual), a model long proven in 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 in BTC and ETH perps before expanding.

Options, he noted, require deep underlying liquidity to function effectively, while client interest is also emerging in S&P 500 and interest-rate perpetuals. The broader product roadmap, he added, mirrors what’s currently available in unregulated markets, but for now, the focus remains firmly on executing the core contracts successfully.