#夏日创作营 The farewell of the inventor of perpetual futures: why BitX has come to this

#夏日创作营 The inventor of perpetual futures bids farewell: Why BitX has come to this
On July 23, the long-established crypto derivatives exchange BitX announced that it would officially permanently shut down at 04:00 on September 23 (UTC) and has immediately stopped new user registrations. Its parent company, HDR Global Trading Limited, said the decision was made after a strategic review of its business and the entire crypto industry. BitX will implement position limits starting August 26—no new positions will be allowed, only position reductions and closing trades; it will then gradually enforce liquidations to liquidate the market in an orderly manner. Any positions that have not been closed by the shutdown date of September 23 will be directly force-liquidated. This means that the exchange, which has operated for more than 11 years, will completely exit the historical stage.
A creator of an era
BitX was co-founded in 2014 by Arthur Hayes, Ben Delo, and Samuel Reed. Its best-known achievement is being the first to create and popularize perpetual futures as a product—before that, the crypto derivatives market had only traditional delivery futures. Perpetual futures, combined with up to 100x leverage, helped BitX rise rapidly during the bull market cycle of 2017-2019. At its peak, annual trading volume once exceeded $10k and accounted for about 57% of the global crypto derivatives market; in July 2018, the highest single-day trading volume reached $8B, and daily turnover at one point surpassed 1 million BTC.
In a sense, the product prototype of the perpetual futures business now pushed by exchanges such as bn and Byb is laid by BitX. Notably, the company emphasized that over more than 11 years of operation, there has never been any incident of funds being stolen by hackers.
Struck down by regulators, its market share eaten away by competitors
BitX’s decline is essentially a multi-year struggle. In 2020, the U.S. Department of Justice accused BitX and three co-founders of violating the Bank Secrecy Act, failing to establish effective anti-money-laundering and customer identity verification procedures; in 2022, the three pleaded guilty to the related charges. This prolonged regulatory standoff led the founders to gradually step back from day-to-day operations, and also left BitX stuck during a window when it most needed to focus on its business—ironically, that period was precisely the golden age when offshore exchanges such as bn and Byb quickly rose and seized market share. According to Kaiko data, BitX’s share in the global crypto exchange market is now under 0.01%, essentially negligible.
Interestingly, the founders later also received a pardon from U.S. President Trump, as part of his administration’s crypto industry regulatory-relaxation policy—but this long-delayed “exoneration” could no longer reverse BitX’s market position loss over many years.
Tried to get acquired but it failed; finally chose a decent exit
As early as February 2025, BitX hired investment bank Broadhaven Capital Partners and kicked off a sale process, trying to find a buyer, but never managed to complete a deal. That year, the company also consecutively lost key executives such as the CEO, CFO, and the head of growth, with management nearly emptied within three weeks. After the shutdown announcement was released, BitX’s own platform token BMEX plunged by more than 90% and its market capitalization shrank to about $497k. In its statement, the company characterized the closure as “the end of an era,” rather than a forced exit due to financial trouble, saying, “Although it looks different today from back then, we’re proud of our history over these 11+ years and the role we played in shaping the entire crypto industry.”
Not just a company story, but a snapshot of shifts in industry structure
BitX’s exit, to some extent, reflects the double squeeze faced by centralized derivatives exchanges overall: on one side is the scaled-up competition from centralized platforms such as bn, Byb, and OK. According to CoinGecko data, in Q2 2026 the trading volume of perpetual futures on centralized exchanges fell by 10% to $1.27 trillion. On the other side are decentralized perpetual futures exchanges (perp DEXs) represented by Hyperliquid, continuously grabbing share and now accounting for 13.5% of total open positions. For exchanges like BitX, which has already been marginalized in size and has long carried the burden of regulatory history, the significance of continuing independent operations under such double pressure is no longer great.
Written at the end
Perpetual futures, in a sense, has become one of the most representative—and also the most controversial—financial innovations in crypto. It allowed ordinary traders for the first time to participate in contract-game speculation with extremely high leverage without ever settling, and it reshaped the trading culture across the entire industry. And its inventor ultimately did not fall because the product itself failed, but because of a long regulatory tug-of-war and the subsequent erosion of market share. This serves as a reminder to everyone in crypto: first-mover advantage and technical innovation are certainly important, but whether you can get through the compliance cycle and defend existing market share is often the key variable that determines how far an exchange can go.