SINGAPORE – The Singapore Exchange (SGX) will introduce Bitcoin and Ethereum perpetual futures on Nov 24 to meet rising institutional crypto demand, bridging traditional finance and crypto-native ecosystems.
These contracts will offer institutional, accredited and expert investors a continuous, no-expiry structure coupled with robust clearing and margining standards of listed derivatives, said the exchange in a bourse filing on Nov 17.
They will also adopt a funding rate mechanism, which allows for a reset of the basis risk.
This also ensures that the price of the futures contract converges towards the underlying cryptocurrency index price, mitigating the issue of basis risk that typically arises from hedging using traditional futures that have long expiry dates, said SGX in an FAQ document on its website.
The contracts will be benchmarked to iEdge CoinDesk Crypto Indices, which cover real-time benchmarks and reference rates for Bitcoin and Ethereum, SGX added.
Although perpetual futures account for more than US$187 billion (S$243.7 billion) in daily average volumes globally with Asia at the epicentre of growth, these flows remain largely priced off and settled on offshore platforms outside the region, said SGX.
Noting that digital assets have made their way into institutional investors’ portfolio, SGX Group president Michael Syn said: “We have taken the next logical and deliberate step – applying the same institutional discipline that underpins global markets to crypto’s most-traded payoff.”
SGX added in its release that the launch drew encouraging feedback from market participants, as they view it as a timely and strategic step in advancing access to crypto markets – which have become increasingly mainstream.
Mr Patrick Yeo, DBS Bank’s head of digital assets for global financial markets, pointed out that crypto perpetuals offer institutional traders enhanced precision and capital efficiency when managing their digital asset portfolios, compared with spot trading.
Ms Gracie Lin, OKX Singapore’s chief executive, noted the growing demand for regionally anchored benchmarks, particularly as institutions look to integrate crypto exposure with other asset classes.
“It is a natural step in Singapore’s market evolution, and this deeper reference point adds transparency and confidence for institutional participants, helping to support long-term growth of the ecosystem,” she added.
THE BUSINESS TIMES