What are perps, anyway? Everything you need to know about crypto’s hottest trading instrument

Perps Week 2026What are perps, anyway? Everything you need to know about crypto’s hottest trading instrumentPerps, which launched on BitMEX in 2016, have become one of the most traded financial products in the world.By Oliver Knight|Edited by Cheyenne LigonUpdated Jul 27, 2026, 11:47 am EDTPublished Jul 27, 2026, 11:00 am EDTPresented byPerpetual swaps, also called perpetual futures or “perps” for short, are the dominant trading instrument in the crypto market, processing an estimated $40 to 50 trillion a year in volume. They dwarf spot trading, and they are the product that professional traders, hedge funds and retail speculators reach for when they want leveraged exposure to the price of bitcoin or tther without owning the underlying asset. Despite their ubiquity, the mechanics that make them work are not widely understood.To understand perps, it helps to understand what came before them. In traditional finance, leveraged exposure to an asset typically comes through a futures contract, an agreement to buy or sell something at a set price on a specific date. When that date arrives, the contract expires and settles. Traders who want to maintain their position must roll it into the next contract.In crypto’s early days, this practice created persistent problems. Futures traded at a premium to the spot price of bitcoin, a concept known as basis, which confused retail traders who wanted straightforward directional exposure. And every time a contract expired, positions closed regardless of whether traders wanted them to. BitMEX, the derivatives exchange founded by Arthur Hayes and Ben Delo in 2014, spent the better part of a year shortening contract durations trying to solve this, moving from quarterly to monthly to weekly to 48-hour to 24-hour expiries, but none of that was enough.A contract that never expiresThe perpetual swap, which Delo developed and BitMEX launched in 2016, resolved the problem by eliminating the expiry date entirely, creating a derivative contra…

What are perps, anyway? Everything you need to know about crypto’s hottest trading instrument

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