SGX's Crypto Futures Attract New Liquidity, Not Diverted Cash, Says Exchange Boss
Singapore Exchange (SGX) launched BTC and ETH perpetual futures about two weeks ago, and these contracts are incrementally building liquidity and enhancing price discovery.
Michael Syn, president of SGX, explained that institutional participants mainly engage in cash-and-carry arbitrage rather than taking outright long positions. He noted that regulated perpetual futures provide improved risk management compared to other products.
On November 24, nearly 2,000 lots traded, equivalent to about $32 million notional, with cumulative trading reaching approximately $250 million since launch. SGX emphasized that this volume represents new money entering the crypto futures market, rather than funds redirected from other trading venues or over-the-counter desks.
The exchange aims for its BTC and ETH perpetual futures to become the benchmark contracts during Asian trading hours, serving as key references for pricing and liquidity within the region.
Regulated perpetual futures on SGX differ from typical high-leverage contracts by avoiding automatic liquidations. Margins are set conservatively, and brokers have the option to top up accounts for clients to manage risk.
Basis trading, which consists of buying spot or ETF assets while hedging with futures, is prevalent; up to 90% of Bitcoin ETF interest stems from basis traders.
For now, SGX's immediate focus remains on building liquidity and trust in the current perpetual futures offerings. While there is interest in introducing options or altcoin perpetual futures as well as S&P 500 and interest-rate perps, these products are part of a longer-term roadmap rather than immediate plans.
