Perptual Futures: The New Engine of the Crypto Market in 2025

The crypto bull market of 2025 has already arrived, but its driving force is very different from the past. If we still rely on spot trading volume to judge market heat, we might only glimpse a corner of the whole picture. The true protagonist of this bull market is Perptual Futures— a vast, high-leverage arena where intense opposition between long and short positions takes place. The liquidity, narratives, and wealth effects here are shaping the entire market in unprecedented ways.

This article will explore why liquidity has unprecedentedly concentrated in the contract market, and reveal through a digital case how "short-seller liquidations" have become the core mechanism driving the spiral rise in asset prices.

1. Data Pivot: Dominance of the Contract Market

The data clearly shows an astonishing fact: the trading volume of Perptual Futures has completely surpassed the spot market.

1. Trading Volume Comparison: Data from the second quarter of 2025 shows that the trading volume of crypto derivatives (primarily Perptual Futures) on mainstream exchanges is typically 10 to 15 times that of spot trading volume. This means that when the spot market trading volume is 10 billion USD, the contract market could reach 100 billion to 150 billion USD.

2. Open Interest: Observe the open interest of mainstream cryptocurrencies such as BTC and ETH, as well as popular new coins, which far exceeds the spot inventory of the exchanges. This indicates that most market participants' risk exposure and capital are deployed on the derivatives side.

3. Funding Rate: During this bull market, the funding rate has remained high for a long time. This has attracted a large number of "arbitrageurs" to earn stable profits through the strategy of "shorting Perptual Futures + buying an equal amount of spot", further withdrawing liquidity from the spot market and locking it in hedged positions.

Conclusion: The capital, attention, and focus of the market have undergone a structural shift. Perptual Futures are no longer an accessory to the spot market, but have become the core battleground that dominates short-term price fluctuations. The market has shifted from "spot pulling contracts" to "contract games pushing spot."

II. Core Mechanism Revealed: Short Liquidations Drive Price Up

A "strange phenomenon" has emerged in the market – the price increase did not start from spot buying, but is driven by the clearing of contracts. This is the core mechanism of this "Perptual Futures bull market."

The following is a simplified digital case used to explain this process:

Example: New coin "RocketCoin" (RKT)

Background setting:

• RKT is a popular new project with an initial circulation of only 1 million tokens (1/10 of the total supply).
• A trading platform has launched RKT's U-based Perptual Futures.
• Current spot price: $10
• The contract market has accumulated a large number of short positions, with $10 million worth of short orders (300,000 RKT) waiting to be liquidated between $11 and $15.

Launch Process:

1. Initial ignition: An investor invests $200,000 in the spot market to buy 20,000 RKT, pushing the spot price from $10 to $11.

2. First round of liquidation: RKT price reaches $11, the first batch of short positions is forcibly liquidated. Assuming this batch of positions is worth 1 million dollars.

   • The clearing mechanism requires the immediate purchase of RKT contracts worth 1 million USD.
   • After the market maker sells the contract, they immediately buy an equivalent amount of RKT in the spot market for hedging.
   • This spot buy order further pushed the price up to $12

market makers buy spot to hedge

4. Entering the orbit: a cycle of repetition, forming a positive clearing spiral. Each layer of short selling liquidation becomes fuel for the next round of price increases, pushing the RKT price from $11 all the way to $15 or even higher. The initial "ignition" fund of $200,000 leveraged passive buying of millions or even tens of millions of dollars.

Conclusion: This is the essence of the simplified version of "Perptual Futures Bull Market": leveraging low spot liquidity as a pivot point, creating counterparties (a large number of shorts) in the contract market, ultimately using "liquidation" as the engine to drive prices to achieve what seems like a "groundless" increase. The rise in spot prices is more like the result and manifestation of this process rather than the cause.

3. Conditions for Formation: Timing, Geography, and Harmony among People

This phenomenon was not significant in previous cycles and is the result of multiple factors working together.

1. Timing (Project Strategy): This cycle's projects generally adopt the issuance model of "low circulation, high total circulation market value," creating perfect conditions for artificially controlling the spot market and leveraging the high-leverage contract market.

2. Geographic Advantage (Market Infrastructure): Perptual Futures products have become extremely mature after years of development. A smooth trading experience, deep liquidity, a complete API, and a market maker system enable it to support massive amounts of capital and complex strategies.

3. People and (Market Consensus and Narrative):

   • "Shorting new coins" has become a common strategy, creating a lot of "fuel" for the market.
   • High-yield case studies in contract trading continue to attract participants with a high risk appetite.
   • The complex strategies such as funding rate arbitrage and liquidation order grabbing have transformed the market from a simple long-short confrontation into a multi-role, multi-dimensional financial game, further locking in liquidity.

Conclusion

The current "Perptual Futures bull market" reflects changes in the deep structure of the market. It not only tells the story of wealth growth but also reveals a complex financial parable about leverage, liquidity, mechanisms, and the human game.

In this new landscape, spot trading has become the ultimate embodiment of hedging and pricing, while Perptual Futures serve as the core vehicle that truly defines the market pulse, integrating narrative, capital, and mechanisms. Understanding and adapting to this game rule of "using counterparty liquidation as fuel" may be the key to navigating through this cycle.

Financial games are always evolving, and new confrontation modes will inevitably bring new experiences. Regardless, we should maintain a sense of reverence for the market.