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NYSE, Crypto Exchange to Offer No-Expire Oil Futures
Brent, WTI Will Underpin New Perpetual Contracts
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Key Takeaways:
- ICE and crypto exchange OKX plan to launch oil futures that don’t expire, based on key benchmarks like Brent and WTI.
- The contracts will rely on ICE’s existing futures prices for oil, linking crypto-based trading directly to established global benchmarks.
- The offering will be available on OKX in regions where it’s licensed, marking a step in blending traditional energy markets with digital trading platforms
Intercontinental Exchange Inc., owner of the New York Stock Exchange, is working with crypto exchange operator OKX to launch oil futures contracts that never expire.
ICE’s futures prices for Brent crude and West Texas Intermediate, known as WTI, will underpin the new perpetual contracts offered on OKX’s platform, the companies said in a statement May 22. The new contracts will be available on OKX, in which ICE holds a stake, across territories where the crypto company is already licensed to offer perpetual futures.
“Oil markets are critical to the world economy,” Haider Rafique, global managing partner at OKX, said in the statement. Bringing ICE’s benchmarks “into regulated perpetual futures is exactly the kind of bridge between traditional and digital markets that market participants have been asking for.”
Perpetual futures, also known as “perps,” are a type of derivative contract that give traders the ability to bet on prices of assets such as oil or Bitcoin. But unlike traditional futures, perps never expire, so traders don’t have to take possession of physical barrels of oil or roll over those contracts.
While perps began on crypto-native exchanges as a way to speculate on digital token prices, the growth into other assets has taken off in recent months, especially as news breaks over the weekend, allowing investors to take action outside of regular market hours.
Most perpetual products are offered on offshore exchanges and aren’t regulated in the way traditional commodity exchanges such as ICE and CME Group Inc. are in the U.S. Michael Selig, the chair of the Commodity Futures Trading Commission, has said recently that he hopes to bring them under the agency’s oversight soon.
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Hyperliquid, a fast-growing crypto exchange, started offering contracts tied to real-world assets including crude.
CME and ICE have been pushing regulators including the CFTC to rein in Hyperliquid, Bloomberg reported last week.
In a sign of the convergence of crypto and traditional financial firms, ICE and OKX struck a deal in March, where both firms said they would work together to build technology, including blockchain networks, that would give ICE’s customers access to crypto-based futures and OKX customers the ability to trade tokenized securities on NYSE’s platform.
The new perpetual contracts based on ICE’s data “allow OKX’s customer base of 120 million retail traders to access energy benchmark products,” said Trabue Bland, senior vice president of futures exchanges at ICE.
