How it works
You buy or short a perpetual to gain leveraged exposure to BTC, ETH, or hundreds of altcoins without holding the underlying. Position size can be 5 to 100 times your collateral depending on the venue. There is no expiry, so the position can be held indefinitely as long as funding and margin are maintained.
Example
You long 1 BTC perpetual at $43,000 with 10x leverage. Required margin is $4,300. If BTC rises to $44,000, you gain $1,000 on $4,300 margin, a 23 percent return. If BTC falls to $42,140, the loss equals your margin and your position is liquidated. The same notional exposure on spot would have taken $43,000 of capital for the same dollar profit.
Why it matters
Perpetuals are the dominant product on crypto derivatives venues, with daily volume often exceeding spot by 5 to 10 times. They let you express directional views with capital efficiency, hedge spot holdings, or short an asset without borrowing it. The cost is funding and liquidation risk under sharp moves.
