BitMEX CEO explains how perpetual swaps test altcoin value

As the cryptocurrency market matures, advanced trading instruments like perpetual swap contracts are increasingly influencing the value of altcoins, according to BitMEX CEO Stephan Lutz.

Perpetual swap contracts are a type of crypto trading contract that lets traders bet on the price of a coin without actually owning it. The derivatives product functions similarly to a futures contract. However, it never expires, which means that traders can hold the position as long as they want.

Lutz told Cointelegraph that perpetual swap contacts are important to track because newly launched perpetual swaps allow traders to short the underlying altcoin for the first time. Lutz said this is where “true price discovery” begins:

“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.”

Lutz said perpetual swaps allow for long and short positions, which helps traders hedge or speculate. “Tracking these positions can reveal directional bias,” he added.

This means that tracking perpetual swap movements can also give traders a closer look at how the market determines an altcoin’s value.

How exchange listings affect perpetual swap contracts

Lutz said 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. This means that observing the intricacies of perpetual swap data can also benefit spot market traders.

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.

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.

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.

On the other hand, Bybit and BitMEX showed similar values at around 41%. Meanwhile, Binance showed a perfect split of 50%, which means that some contracts reached their all-time highs on the first day while others didn’t.

“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.