SGX launched the new crypto perpetual futures contracts, designed for accredited, institutional and expert investors, on two major cryptocurrencies: Bitcoin and Ethereum.
These instruments mark an important milestone in the convergence of regulated exchange-trading and digital-asset derivatives, offering market participants a familiar futures-like structure but with perpetual characteristics.
What Are Perpetual Futures?
Contrary to traditional futures contracts that have fixed expiry dates, perpetual futures (also known as “perps”) have no fixed expiry. They facilitate continuous exposure to the underlying assets, with regular funding payments to anchor the contract price to spot.
Key features:
Why SGX Is Launching Them
Important Considerations & Risks
Before engaging with these contracts, participants should be mindful of certain risks and operational considerations:
- Accreditation requirement: The contracts are available only to Accredited investors, Institutional investors and Expert investors.
- Funding-rate volatility: While the funding mechanism helps anchor price, it can introduce costs or gains depending on market positioning.
- Counterparty & regulatory risk: Although SGX is a regulated exchange, crypto-derivatives entail unique risks (digital-asset underlying, liquidity, extreme price movements).
- Not for retail: Given their structure and risk profile, these are not targeted at retail investors.
- Margin/clearing: Exchange clearing, margin requirements and other operational controls will apply.
What This Means for the Market
The launch of SGX crypto perpetual futures may be a signal of further institutionalisation in the crypto-derivatives space, especially in Asia. It offers:
- Greater transparency and regulatory oversight, relative to purely OTC or unregulated platforms
- Increased bridging between traditional finance (institutions, brokers, exchanges) and digital-asset markets
- New trading infrastructure in Southeast Asia, potentially positioning SGX as a hub for crypto derivatives in the region
- Product evolution: The introduction of perpetuals indicates derivative product innovation beyond expiry-based futures.
For market participants, it means a potential widening of opportunity sets—but also a need to understand the nuanced mechanics of perpetual futures.
Final Thoughts
The SGX crypto perpetual futures mark an important milestone for regulated crypto derivatives.
For qualified investors with appropriate expertise and infrastructure, these instruments can offer new tools for hedging, exposure and bespoke trading strategies in digital assets. However, as with all complex derivatives, they deserve careful evaluation of structure, risks and fit within a broader portfolio.
If you’re exploring participation in SGX’s crypto perpetual futures and would like to understand how this may fit your trading or hedging needs, you may contact us to find out more.
Start Trading with Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker by aggregated trading volume across China’s two regulated exchanges.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team’s round-the-clock availability on trading days to provide assistance for all your trading needs.
