Recently, I’ve been analyzing trading data in the altcoin market and discovered a quite interesting paradox: exchanges are listing more and more perpetual contracts, but the overall trading activity of long-tail assets is actually declining. This has led me to ponder a question—what truly can ignite the next bull market?

My conclusion might surprise many: it’s not a new narrative, celebrity endorsements, or halving cycles. It’s an upgrade to the trading mechanism itself.

This viewpoint sounds bold, but looking back through financial history, you’ll find that this pattern has never failed.

Starting in Amsterdam in 1609. That year, a merchant named Isaac le Maire did something considered crazy at the time—he borrowed shares of the Dutch East India Company, sold them, and bet they would fall. This was the first recorded short sale in human history. The Dutch government was furious, and Parliament legislated to ban short selling, branding le Maire as an enemy of the state.

But this story didn’t end with the ban. Despite repeated legal prohibitions, short selling never truly disappeared from Amsterdam. Why? Because market participants uncovered an undeniable fact: with short selling, prices become more truthful. Overvalued stocks could no longer sustain false prosperity indefinitely.

Four hundred years later, the crypto market is reenacting the same script. In an ecosystem of thousands of altcoins, there’s only buying—no shorting. Prices only reflect half of optimism; pessimistic voices are forcibly silenced. Every cycle repeats itself: FOMO drives prices higher, bubbles burst, chaos ensues, then everyone waits for a new concept to restart the cycle.

But history has long told us—every introduction of short selling rights is not the end of the market, but its beginning.

Looking at Wall Street’s evolution makes this clear. On May 17, 1792, 24 brokers signed an agreement under the sycamore tree, the precursor to the New York Stock Exchange. Back then, the market was exactly like today’s altcoin market: only buying, holding, waiting for dividends. No leverage, no shorting, no standardized settlement. Daily trading volume was less than $500k, with only dozens of participants. The market was tiny because there were so few options.

By the 1850s-1860s, short selling became a standard tool on Wall Street. Names like Jacob Little, Daniel Drew, Jay Gould waged bloody battles of longs and shorts over railroad stocks. Society’s reaction was similar to 1609 in the Netherlands—legislators denounced short sellers as enemies of the nation, newspapers claimed they profited from others’ disasters. Public fear of short selling remained almost unchanged for four centuries.

But what was the objective result? Every short sale created a sell order and a future buy order. Trading volume increased, spreads narrowed, more people entered the market. Wall Street transformed from a small circle of a few dozen into a true capital market.

After the 1929 crash, the U.S. Securities and Exchange Commission made a historic choice in 1938: instead of banning short selling, it introduced the uptick rule—shorts could only be executed when the stock price was rising. This decision cannot be overstated. It established a principle that persists today: short selling should not be eliminated, but regulated.

With rules in place, short selling ceased to be a gray area. Institutional funds, previously wary of shorting, now had legal protections and dared to participate at scale. Regulation didn’t kill short selling; it made it safer and more trustworthy, attracting more capital. The crypto market still hasn’t fully learned this lesson.

In 1973, the Chicago Board Options Exchange opened, marking a “1973 CBOE moment” for crypto. Options expanded the market’s strategic dimensions from two to four. Investors could now express precise market judgments—not just up or down, but when, how fast, and by how much. More importantly, options provided institutional investors with complete hedging tools. With hedging, they dared to take larger positions; more large positions meant more capital inflow, and bull markets followed.

Turning to crypto. In May 2016, a leading derivatives exchange launched perpetual contracts—the first shorting tool in crypto. By September 2019, mainstream platforms listed BTC perpetual contracts, making shorting mainstream.

What happened? Exactly like Wall Street in the 1860s: liquidity exploded, price discovery became two-way, and volatility structures became more orderly. The 30-day annualized volatility of BTC dropped from over 150% during the 2017 bull run to 60-90% during the 2020-2021 bull. The gains were larger, but volatility was more controlled. Sharp rises and falls still occurred, but the “silent decline over three months with no volume” pattern diminished because shorts would cover at certain levels, creating natural support.

More critically, the scale of capital shifted dramatically. With hedging tools, institutional funds were willing to enter in large volumes. You can’t expect a fund manager managing billions of dollars to pour money into a market that only allows long positions and no hedging. Perpetual contracts didn’t just give retail traders the right to short; they laid the infrastructure for institutions to participate.

Short selling didn’t kill BTC. It transformed BTC from a $500k speculative asset into a $2 trillion asset class. That’s the real story of a bull market.

The 2020-2021 DeFi wave followed the same pattern. Many viewed DeFi Summer as a pure narrative hype, similar to NFT booms or metaverse concepts. But that’s a fundamental misunderstanding. The essence of DeFi isn’t narrative; it’s a structural leap in trading mechanisms.

AMMs rewrote the underlying logic of trading. Before Uniswap, trading required order books, market makers, and centralized matching. AMMs overturned all that—anyone could create liquidity pools with two tokens, and anyone could trade instantly without counterparties or permission. This isn’t just a narrative; it’s a paradigm shift in trading infrastructure.

Lending protocols created on-chain leverage and cyclical strategies. Aave, Compound allow users to collateralize assets to borrow others—essentially on-chain margin trading. This gave rise to “cyclical lending”: collateralize ETH to borrow stablecoins, buy more ETH with stablecoins, then repeat… This strategy is called leverage long in traditional finance, wrapped as “yield farming” in DeFi, but the underlying logic is identical.

AMM + lending + liquidity mining + cross-protocol arbitrage—these “money Lego” combinations created strategic spaces never seen in traditional finance. Each new combination is a new way to participate, bringing in new funds and new users.

The 2020-2021 super bull wasn’t just two factors stacking; it was three: BTC and ETH perpetuals and options provided on-ramps for institutions; DeFi’s AMMs and lending protocols fundamentally changed on-chain trading; narratives were just the surface layer of these two mechanism evolutions.

Once again, the same pattern is confirmed: every evolution in trading mechanisms spurs the next boom.

But this pattern hits a wall at the altcoin level.

From late 2023 onward, exchanges have listed perpetual contracts for altcoins at an unprecedented pace. Nearly every week, new trading pairs appear—from mainstream chain tokens to AI concepts, from GameFi to Memes, even projects with only a few tens of millions in market cap now get perpetual contracts.

On the surface, this seems like a continuation of the historical pattern. Objectively, these perpetual contracts do create liquidity out of thin air—projects valued at billions but with only a few million in circulating supply can’t sustain meaningful depth with spot alone. Perpetual market makers provide bid-ask quotes using stablecoins, injecting synthetic liquidity into these fragile markets.

But this time, the pattern doesn’t hold.

The problem lies in the disconnect between “liquidity” and “confidence.” Creating liquidity presupposes willing participants willing to gamble. But recent reality is—everyone is scared.

Retail traders are scared. After multiple blowups and rug pulls, their trust in altcoins has hit rock bottom. More deadly, many new projects with perpetual contracts have distorted tokenomics: billions in valuation paired with extremely low circulating supply, meaning massive token unlocks could crash the price. Retail isn’t stupid—they give you a shorting tool, but the underlying asset is a designed slow bleed machine. Why participate?

Whales are scared. Launching perpetual contracts exposes their market manipulation to short-sellers. Previously, in spot markets, whales could easily pump and dump at low cost; shorts posed no threat. Now, every pump risks attracting a flood of shorts, sharply increasing the cost of maintaining the price. Many project teams respond by simply letting the price drift down naturally—no more pumping, just slow decline, selling unlocked tokens gradually. Without the incentive to pump, there’s no profit motive; without profit, no trading.

Market makers are scared. This is the most critical point. Providing market-making for a project with only tens of thousands of dollars in daily volume is extremely risky. Thin liquidity means prices can be manipulated easily, inventory risk is hard to hedge. In extreme conditions, market makers can’t unload their positions. After a few losses, they tighten quotes, widen spreads, reduce depth, or even withdraw altogether. Without market makers, liquidity evaporates into an empty shell.

Worse, the remaining altcoin perpetual contracts have become private casinos for whales. With small circulating supply and concentrated chips, whales can do whatever they want—pump with spot, then harvest shorts on perpetuals; or crash the price by shorting on perpetuals and selling spot. Repeatedly, perpetual high leverage becomes a tool for whales to amplify gains, not a hedge for retail.

Originally, shorting tools should constrain whales’ power. But in these ultra-thin markets, they’ve become another weapon in the whales’ arsenal.

The paradox emerges: more and more perpetual contracts are listed, yet trading volume and activity in the altcoin market are shrinking.

What does this tell us? The mechanism upgrade of perpetual contracts has hit a ceiling for altcoins. They are heavy infrastructure—requiring market makers, oracles, funding rates, centralized approval to operate. BTC and ETH can sustain this; thousands of long-tail altcoins cannot—they run the machine, but it’s out of fuel. Those barely running are just cash cows for whales.

From a mechanistic perspective, why perpetuals are doomed for altcoins:

Liquidity death spiral. Perpetuals need market makers to provide stable bid-ask quotes. Who’s willing to do that for unknown projects with only tens of thousands of dollars in daily volume? Without market makers, no liquidity; without liquidity, no traders; without traders, market makers won’t come. Spot leverage shorting doesn’t require building derivatives from scratch—borrow tokens, sell in existing DEX pools. Lending protocols supply, AMMs execute—decoupled.

Two prices, two worlds. Perpetuals and spot are separate pools. When pools are thin, a single trade can cause wild spreads. You’re not really shorting the project; you’re gambling in a parallel universe decoupled from spot. Spot leverage involves a single market; no disconnection.

Funding rate manipulation. Whales push up perpetual prices to create extreme funding rates, bleeding shorts every few hours. Even if they’re right, they get worn out. Worse, whales manipulate both spot and perpetuals—pumping spot, shorting perpetuals to trigger liquidations. Spot leverage depends on borrowing costs, driven by supply and demand, not by long-short ratios.

Synthetic positions don’t generate real sell pressure. This is key. Shorting perpetuals doesn’t produce actual sell orders in spot. Whales manipulate spot and perpetual markets independently—shorts in perpetuals pose no threat to spot holdings. Spot leverage involves borrowing real tokens and selling them—actual sell pressure directly impacts price. To keep prices high, whales must buy real tokens.

Approval and oracles. Perpetuals require exchange approval and reliable oracles; small projects lack both. On-chain lending for shorting doesn’t need approval; liquidation prices are based on real-time AMM prices.

Perpetuals are heavy infrastructure—costs outweigh the value they create for long-tail assets. What altcoins need is a lightweight shorting method—borrow tokens, sell, and buy back lower. That’s spot leverage lending short.

From 1609 Amsterdam to 1860s Wall Street to today’s crypto community, the fear of shorting has never changed. “Shorting crashes the market.” “Shorting is malicious.” “Shorting causes market collapse.”—Four centuries of nearly identical rhetoric.

But four centuries of history repeatedly prove the same fact: the cost of fearing shorting far exceeds shorting itself.

When criticism is suppressed, praise becomes meaningless. When shorting is banned, long positions also lose significance. Because in a market that only allows buying, prices only reflect half of the optimism. The pessimistic half—doubts, negative news, fraud—is forcibly silenced. Everyone can only “like,” no one can “dislike.”

Such prices are distorted, fragile, and unsustainable. They’re not price discovery; they’re price illusions.

Having both long and short options is the most basic respect for price discovery. With genuine price discovery, markets can be sustainable. Institutions will come because prices are credible; market makers will participate because both sides are tradable; long-term investors will stay because current prices have been tested by shorts, not manipulated by whales.

Conversely, markets without price discovery can only survive on narratives. Every hype cycle ends in chaos, then another narrative appears to lure in new buyers. This cycle repeats endlessly, never allowing accumulation.

The greatest tragedy of the altcoin market isn’t “too many whales,” but the complete absence of basic price discovery. If prices aren’t real, what’s the point of long-term value?

The most counterintuitive pattern in history: every time a shorting mechanism is introduced, in the long run, it doesn’t lower prices but raises them.

After shorting became widespread in the 1860s, NYSE trading volume grew tenfold over a decade, transforming Wall Street from a small circle into a true capital market. After the uptick rule was legalized in 1938, institutional funds flooded in, and the S&P 500 rose 340% over the next 30 years. After options emerged in 1973, trading volume increased 10,000-fold over 50 years, and U.S. stocks experienced decades of expansion. When BTC perpetuals launched in 2019, BTC volatility dropped from 150% to 50%, yet market cap expanded from $10 billion to $2 trillion.

In every case, the outcome wasn’t market collapse but market expansion. The reasons are threefold:

Shorts create liquidity—each short is a sell order plus a future buy (cover), so active shorting deepens liquidity.

Shorts attract new participants—market makers, quant funds, hedge funds, arbitrageurs aren’t here to crash the market; they provide liquidity, which fuels bull markets.

Shorts build trust—prices tested by shorts are more credible, attracting real capital, which drives genuine growth.

Complete trading tools don’t destroy confidence; they build it.

Today’s altcoin market is stuck in a death spiral: only longs, single pattern, fewer profits, less participation, liquidity dries up, market stagnates. Gambling can still bet big or small, or on the dealer, but why can’t altcoins be shorted?

Perpetual contracts can’t fix this—recent experiments have proven it. They’re heavy infrastructure, unsustainable for long-tail assets. Listing perpetuals has become another narrative trigger—like “listing spot” or “listing Alpha”—a headline for news trading, divorced from actual trading and market dynamics. Trading tools are meant to serve trading, not become the object of trading—especially for long-tail assets, perpetuals are structurally the wrong tool.

The right path is on-chain “native spot leverage shorting”—through over-collateralized lending, borrowing real tokens, selling in spot, creating genuine sell pressure, and participating in real price discovery. No market makers from scratch, no oracles for anchoring, no funding rates to arbitrage, no approvals needed.

This aligns with every historical emergence of shorting. In 1609, le Maire’s short wasn’t approved by Amsterdam Exchange. In the 1850s, short selling wasn’t designed by NYSE. They were all spontaneously created by market participants—first tools, then rules. The SEC’s role in 1938 wasn’t inventing shorting but establishing a regulatory framework for a nearly century-old practice.

On-chain short protocols are following the same path.

When this happens—when a long-tail altcoin is no longer just “buy and wait,” but a genuine battlefield of longs and shorts in the spot market—the market’s quality will fundamentally change. Liquidity will return, participants will come back, capital will flow in. Not because of new stories, but because of new ways to play.

This is the true ignition for the next bull market.

If the pattern of history continues—and there’s no reason to believe it won’t—the next altcoin bull run won’t be driven by a new narrative, a celebrity shout, or a halving event.

It will be an infrastructure upgrade: enabling thousands of long-tail altcoins with on-chain native spot leverage shorting tools. That’s where the market’s true pricing power lies. This time, it’s not about BTC liquidity spilling over into altcoins, but the other way around.

In 1609, the Dutch government banned shorting, and le Maire was publicly condemned. In the 1860s, U.S. Congress denounced short sellers as enemies of the nation. After the 1929 crash, the public demanded the complete eradication of short selling. Today, “shorting” remains a dirty word in crypto.

Four centuries on, the fear of shorting has never changed.

But four centuries of history also repeatedly prove the same fact: every time this fear is overcome and shorting rights are introduced, markets don’t collapse—they expand. Amsterdam became a global financial hub. Wall Street grew from a small circle into a trillion-dollar capital market. BTC grew from $10 billion to $2 trillion.

Now, thousands of altcoins are locked in a “long-only” prison. Without shorting, there’s no price discovery; without price discovery, there’s no trust; without trust, there’s no lasting prosperity. The entire market degenerates into a game of “betting on what’s expected”—fewer profits, less participation, more silence. And those altcoins with perpetual contracts? Short tools have become new weapons for whales to harvest, accelerating market trust erosion.

When criticism is suppressed, praise becomes meaningless. When shorting is banned—or reserved for whales—the prices will never be truly honest.

What’s more terrifying than the fear of shorting is a market without price discovery. What’s more frightening than no bull market is a market that can never accumulate.

Bull markets are never accidental; they are born from mechanism evolution. And every such evolution, from 1609 to today, has the same core—restoring shorting rights to the market. Who’s willing to walk with us, to shout together: “No matter what you think, you can short”?