In the first quarter, trading of tokenized traditional assets saw a notable surge, with commodity and equity-linked perpetual swaps amassing billions in weekly volume. This has enabled continuous trading across various markets.
According to BitMEX, by the end of March, the weekly trading volume for such assets reached $30.7 billion, accounting for 1.72% of the total crypto derivatives market. This represents a significant increase from 0.03% in December, as reported by the exchange that introduced these tools in 2014.
Commodities were at the forefront of this rise. Contracts linked to silver, gold, and crude oil experienced sharp increases in demand due to price volatility and geopolitical tensions. Following the U.S.-Israel strikes on Iran starting February 28, weekly oil trading volumes surged to $6.9 billion as round-the-clock activity intensified.
Despite commodities experiencing a 65,000% increase in volume during the quarter, context is essential. Silver reached over $100 per ounce and gold increased by nearly 24% at the year’s start, though these gains were largely reversed later.
Equity-linked perpetual swaps also saw substantial growth, with their weekly volume rising 908% to approximately $4.9 billion. At its peak during February’s metals rally, total weekly volume across traditional investment-linked perpetuals reached $54.5 billion.
Oil prices began climbing with the onset of hostilities involving Iran, due to its control over the Strait of Hormuz—a crucial route for 20% of global oil shipments.
Unlike traditional futures contracts that have expiry dates, perpetual swaps use a funding rate mechanism between long and short positions to keep prices aligned with underlying assets. This feature facilitates continuous trading without an expiry date.
BitMEX highlighted that the allure of constant access to traditional financial markets is driving the growth in tokenized perpetual swaps. The current macroeconomic volatility has further fueled this trend, prompting exchanges to introduce TradFi perpetuals.