Hua Er Jie Jian Wen·2025-09-25 01:38Core Insights - The cryptocurrency market is experiencing significant volatility, with over $1.5 billion in long positions liquidated, leading to the most severe flash crash in nearly a month [1] - The introduction of perpetual contracts, a type of derivative with no expiration date, is gaining traction in the regulated U.S. market, indicating a shift towards mainstream adoption by major financial institutions [3][6] Perpetual Contracts Overview - Perpetual contracts allow traders to hold positions indefinitely, with profits and losses directly tied to the price movements of underlying assets like Bitcoin [3] - The appeal of perpetual contracts lies in their high leverage, enabling traders to control larger positions with smaller amounts of capital [4] Market Dynamics - The funding rate mechanism is used to keep perpetual contract prices aligned with spot prices, impacting the profitability of long and short positions [5] - Perpetual contracts now account for approximately 68% of Bitcoin trading volume, reflecting explosive growth in popularity over the past year [5] Institutional Engagement - Major trading platforms, such as Coinbase and Robinhood, are rapidly integrating perpetual contracts into their offerings, highlighting the lucrative nature of this market [6][8] - Robinhood reported that cryptocurrency and options trading contributed nearly 80% of its trading revenue in Q2, showcasing the financial benefits of engaging in this space [8] Competitive Landscape - Other firms, including Gemini, are also entering the market with high-leverage perpetual contracts, indicating a competitive environment among brokers [10]