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Fu Peng, Chief Economist of Xinhuo Group: The essence of Bitcoin perpetual futures is that large holders maintain long-term positions to collect “rent,” while retail traders use leverage to go long and pay fees

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ME News, April 25 (UTC+8), in a post on X, Fu Peng, the newly appointed Chief Economist of New Huo Group, said that the underlying business model of Bitcoin perpetual futures is essentially the same as the “deferred fee/overnight fee” in traditional finance’s gold and industrial spot exchanges. Fu Peng noted that at the time, gold exchanges used daily forced liquidation and settlement, with long and short parties paying deferred fees to each other. When retail investors massively hold high-leverage long positions, the deferred fee becomes the most stable and covert source of revenue for the platform. Today, Bitcoin spot platforms mainly rely on perpetual contracts, with funding rates settled every 8 hours between long and short sides. When longs have the advantage, retail investors with long-term positions continuously pay the funding rate to shorts. Although the platform does not directly collect this fee, it significantly increases trading activity, open interest, and liquidity, indirectly generating a large amount of trading fee income, forming a stable and massive cash flow. In essence, it is a business model where large holders/institutions “collect rent” from long-term holdings, retail investors’ leverage longs pay for it, and platforms indirectly siphon the funds. (Source: ChainCatcher)
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