JPMorgan sees limited institutional demand for perpetual futures
CoinDesk 2026-06-29 12:48:14
Context: JPMorgan's recent report indicates that institutional demand for perpetual futures in the cryptocurrency market remains limited, with most activity driven by speculative trading rather than hedging. The bank's analysts have found that the products offer few incremental benefits over legacy derivatives for institutional investors, citing basis risk, lack of term structure, and clearing concerns as key barriers to adoption. Perpetual futures have become a dominant product in crypto derivatives markets, allowing traders to take leveraged long or short positions without an expiration date.
Key Facts
- JPMorgan's client checks found little institutional interest in perpetual futures beyond speculative trading, with most activity driven by traders seeking leveraged directional exposure rather than producers, consumers, or other participants hedging underlying market risk.
- The bank cited basis risk, lack of term structure and physical delivery, and clearing concerns as key barriers to adoption, making perpetuals less useful for commercial hedgers and benchmarked asset managers.
- Perpetual futures, or "perps," have become the dominant product in crypto derivatives markets, accounting for roughly 90% of crypto derivatives trading and often generating significantly more volume than spot markets.
- Offshore perpetuals trading remains dominated by a small number of large participants, with roughly half of perpetuals volume funded by just 12 wallets, raising questions about market depth and the products' ability to support broader institutional adoption.
- Despite limited institutional adoption, perpetual futures offer advantages for certain users, including continuous trading, flexible holding period, and embedded leverage, making them well-suited to retail traders and momentum-driven strategies.