What are Perps? Everything You Need to Know About Crypto's Hottest Trading Tool
Perpetual futures, commonly referred to as 'perps', have emerged as the most dominant trading instrument in the crypto landscape. Since their inception on BitMEX in 2015, these derivatives have redefined how traders approach leverage and market exposure.
As the industry matures, understanding the mechanics of perps becomes vital for managing risk in highly volatile markets. This deep dive examines how perpetual contracts drive massive trading volumes and influence the broader crypto economy through unique funding rate mechanisms.
Perpetual futures, or 'perps', have become one of the most widely traded financial products globally. Originally launched on BitMEX in 2015, they have moved from the fringes of the crypto market to the very center of institutional and retail trading activity. The defining characteristic of a perp is the absence of an expiration date, allowing traders to hold long or short positions indefinitely, provided they account for the continuous funding rate adjustments.
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