JPMorgan delivers verdict on crypto's most popular product

Institutional investors are largely sitting out perpetual futures, the single most-traded product in crypto derivatives.

In a note on June 29, JPMorgan said that there seems to be very little institutional appetite for the contracts. The understanding is based on conversations with clients and market participants, along with checks across its own trading desks,

The bank characterized perpetual futures as speculative leverage plays rather than credible substitutes for traditional derivatives.

Related: Explained: What is a perpetual DEX? A Wall Street primer featuring Decibel

Perpetual futures, or perps, account for a big chunk of crypto derivatives activity, making them a major engine of price discovery and liquidity.

They let traders hold leveraged long or short positions with no expiration date, relying on a funding-rate mechanism to keep prices aligned with the spot price.

Yet JPMorgan said its desks see negligible institutional demand. The bulk of the flow, the bank argued, comes from traders chasing leveraged directional exposure, not producers, consumers, or other players hedging genuine underlying risk.

In its view, perps deliver few incremental benefits over legacy de

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/crypto/articles/jpmorgan-delivers-verdict-cryptos-most-143000646.html)