Perpetual swap contracts are increasingly serving as a barometer for altcoin valuations, providing traders with critical insights into market sentiment and price discovery, according to BitMEX CEO Stephan Lutz.
Unlike traditional futures, perpetual swaps have no expiration date, allowing traders to hold positions indefinitely. This feature enables both long and short positions, facilitating continuous price discovery and offering a mechanism for hedging and speculation.
Lutz emphasized that the introduction of perpetual swaps for newly launched altcoins often marks the beginning of “true price discovery.” These instruments allow traders to express bearish views through short positions, which can reveal underlying market sentiment and directional bias.
The impact of exchange listings on perpetual swap performance also varies. BitMEX data indicates that 70% of contracts listed on OKX reached new all-time highs on their first day, compared to approximately 41% on Bybit and BitMEX, and a 50% split on Binance. This suggests that the choice of exchange can significantly influence the initial performance of perpetual swap contracts.
Lutz advised traders to carefully consider the exchange when engaging in perpetual swap trading, as the platform’s characteristics can affect return on investment and help avoid potential pump-and-dump schemes.
