Perpetual Futures Trading: Why ‘Perps’ Are Driving a New Speculation Boom
Crypto traders are rushing into perpetual futures trading, contracts known as “perps” that allow investors to apply leverage of 10, 20, or even 100 times on bitcoin.
Once largely offshore, perps are now entering regulated U.S. markets — and the risks and rewards are both exploding.
What are perps?
Perpetual futures are derivatives that mimic traditional futures but never expire. They track the spot price of bitcoin, with gains or losses realized continuously.
A funding rate mechanism keeps perp prices tethered to spot — longs pay shorts when demand overheats, and vice versa.
Example: With $500 at 10× leverage, a trader controls $5,000 worth of bitcoin. A 10% move in price doubles the stake; a 10% drop wipes it out.
Why they are exploding now
- Volume surge: Perps now account for 68% of Bitcoin trading volume, according to Kaiko.
- Retail access: Coinbase, Robinhood (Europe), and Gemini (globally) offer perps with leverage ranging from 10× to 100×.
- Institutional adoption: Cboe plans to launch perpetual contracts (perps) this November, signaling mainstream recognition.
With Bitcoin up more than 70% this year, speculative appetite has surged across both crypto and equities.
From meme stocks to one-day options, perps fit neatly into a market craving leverage and speed.
What it means for traders
- Upside potential: Fast gains possible with small capital outlay.
- Hidden costs: Funding rates can erode returns, especially in crowded long trades.
- Broker benefit: Firms earn higher revenues from derivatives than stock trades — expect platforms to push perps aggressively.
- Volatility risk: Extreme leverage amplifies losses; a single wrong move can wipe accounts instantly.
Who really wins?
History suggests the house often comes out ahead. For Robinhood, Coinbase, and other platforms, perps represent lucrative new revenue streams.
For traders, they represent opportunity — but also a dangerous arena where discipline, risk sizing, and stop-losses are non-negotiable.
Bottom line
The rise of perpetual futures trading signals another speculative chapter for financial markets.
As perps spread from offshore exchanges to mainstream brokers, traders will have easier access to massive leverage.
That access cuts both ways: fortunes can be made in hours, or lost just as fast. For most, the winner may not be the trader at all — but the broker taking the other side.