As the cryptocurrency market matures (or at least pretends to), advanced trading instruments like perpetual swap contracts are strutting their stuff and influencing the value of altcoins, according to BitMEX CEO Stephan Lutz. Who knew swaps could be so…perpetual? 😏
Perpetual swap contracts are like that friend who always wants to bet on the price of a coin without actually owning it. They function similarly to futures contracts, but here’s the kicker: they never expire! So, traders can hold onto their positions longer than a bad relationship. 💔
Lutz told CryptoMoon that these perpetual swap contracts are the new must-have accessory because they allow traders to short the underlying altcoin for the first time. He claims this is where “true price discovery” begins. Sounds fancy, right? 🤔
“Perpetual swaps play a key role in price discovery for newly launched altcoins and are a strong sign of market sentiment as they’re often the first derivatives product to be launched.”
According to Lutz, perpetual swaps allow for long and short positions, which helps traders hedge or speculate. “Tracking these positions can reveal directional bias,” he added, probably while sipping a fancy latte. ☕️
This means that tracking perpetual swap movements can give traders a closer look at how the market determines an altcoin’s value. Spoiler alert: it’s not always pretty! 😅
How Exchange Listings Affect Perpetual Swap Contracts
Lutz mentioned that perpetual swaps often lead to spot price movements. Because of the high liquidity and leverage involved, a surge or a drop can pull spot prices along with it. It’s like a rollercoaster ride, but without the safety harness! 🎢
Similar to spot crypto markets, perpetual swap contracts are also impacted by exchange listings. However, centralized finance (CeFi) trading platforms vary on how listings impact perpetual swap contracts. It’s like trying to figure out which restaurant has the best avocado toast. 🥑
In a report studying how exchange listings affect perpetual swap contracts, BitMEX explained how different exchanges vary in terms of their first-day listings of perpetual swaps. Spoiler: it’s a mixed bag!
From the start of 2025 to March 18, BitMEX’s data showed that 70% of contracts listed on the crypto exchange OKX reached a new all-time high on their first day of being listed. Talk about a hot debut! 🔥
On the other hand, Bybit and BitMEX showed similar values at around 41%. Meanwhile, Binance had a perfect split of 50%, which means some contracts reached their all-time highs on the first day while others…well, didn’t. Oops! 😬
“For traders in particular, having a careful selection process of which exchange to leverage when trading perps can have a big impact on ROI and to avoid the commonly seen pump and dump scheme,” Lutz said, probably while rolling his eyes. 🙄
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2025-04-09 12:12