Arthur Hayes claims perps will define the next era of global derivatives

In the long-form piece, the BitMEX co-founder and Maelstrom chief investment officer says crypto-style perpetuals – or “perps” – have already become the preferred leveraged product for retail traders and will extend from digital assets into equity and even interest-rate markets over the next few years. By the end of 2026, he predicts, the main pricing reference for the largest U.S. tech stocks and key indices such as the S&P 500 and Nasdaq 100 will be equity perps traded on crypto exchanges rather than futures listed on legacy venues like CME.

Hayes traces the origins of perps back to early crypto derivatives platforms in Asia and BitMEX’s own experiments with socialized loss systems and high leverage. He credits Chinese exchanges and early players such as 796, OKCoin and Huobi with pioneering mechanisms like auto-deleveraging and insurance funds, which BitMEX then refined into a 100x-leverage margin model that consolidated liquidity into a single non-expiring contract. According to Hayes, that design helped BitMEX overtake rivals by 2018 and established perps as a core product for crypto traders.

In his view, perps work for retail because they solve “the two L’s: leverage and liquidity.” Crypto exchanges, using socialized loss and insurance funds rather than fully guaranteed clearing, can offer much higher leverage than traditional futures markets, while a single perpetual contract concentrates trading activity instead of splitting it across multiple expiry dates. Hayes contrasts this with contracts-for-difference “bucket shops,” arguing that on-exchange perps give retail traders a transparent orderbook and delta-one exposure that options cannot match in terms of simple payoff and effective leverage.

Arthur also sets out why, in his assessment, traditional exchanges struggle to compete on leverage. Because clearinghouses in regulated markets guarantee settlement, Hayes writes, they need substantial paid-in capital and can pursue a bankrupt trader’s other assets to cover losses. Crypto derivatives venues, by contrast, rely only on posted margin and cannot claw back funds from clients who control self-custodied wallets, which makes socialized loss pools and insurance funds “absolutely necessary” but also enables much higher leverage for volatile assets such as Bitcoin.

The essay recounts BitMEX’s attempt to bring its perp and margin model into the U.S. regulated market. Hayes says he and his team met with the U.S. Commodity Futures Trading Commission (CFTC) in 2018 to explore getting exchange and clearing licenses but were told the agency was not interested, a decision he describes as reflecting regulators’ instinct to protect existing market structures. He then contrasts that failed effort with Sam Bankman-Fried’s later push to win regulatory approval for FTX’s perp business in the U.S. through large political donations, before the exchange collapsed in 2022.

From there, Hayes links the regulatory trajectory of perps to U.S. politics. He argues that after the FTX implosion, U.S. regulators turned “outright hostile” to crypto under Democratic leadership, before a reversal following Donald Trump’s return to the presidency. In Hayes’ telling, Trump’s family experience with being “debanked” after 2020 pushed them toward Bitcoin and crypto, and the new administration then embraced digital assets both for political funding reasons and as a way to challenge the existing financial system.

Because many regulators around the world follow U.S. norms, Hayes writes, a friendlier posture in Washington gives cover for other jurisdictions to authorize perps and similar products. He points to the Singapore Exchange (SGX) launching perpetual futures after Trump’s policy shift as an example of how mainstream venues may adopt structures first developed in crypto, and argues that this status quo is unlikely to change before at least 2029, when Trump’s current term would end.

Arthur also uses the fortunes of exchange founders to illustrate the economic impact of perps. He notes that Binance co-founder Changpeng “CZ” Zhao became one of the world’s wealthiest non-political figures in under a decade as Binance scaled perps and altcoin trading, that Sam Bankman-Fried reached billionaire status at record speed via FTX’s perp-focused model, and that Hyperliquid founder Jeff Yan may already be close to a dollar billionaire as a leading perpetual DEX operator. In Hayes’ view, the “next crop” of crypto exchange billionaires will emerge at the intersection of perps and tokenized stock trading.

Looking ahead, he argues that equity perps are already gaining traction, with daily volumes above $100 million and the potential to scale into the billions as more traders and market makers become comfortable with the contracts. Because these instruments trade around the clock, Hayes says they can be used by both retail and institutions to hedge political, economic and corporate news over weekends and holidays when traditional stock markets are closed, putting pressure on major stock exchanges to extend or fully shift to 24/7 trading.

Beyond equities, Hayes calls interest-rate markets “the final frontier” for crypto-native derivatives. He highlights the scale of contracts such as CME’s SOFR futures and points to DeFi projects experimenting with new ways for retail traders to speculate on yields. In closing, he frames the next phase as a contest between crypto-native platforms and incumbent exchanges, arguing that unless traditional venues overhaul their clearing models and product line-ups, price discovery in some of the world’s most important markets will move to perpetuals – and that legacy players will have to “adapt or die.”