(This article is a compilation by BitMEX and does not represent the views of BitMEX, nor is it investment advice, buy or sell recommendation. See the liability warning at the end of the article for details.)
BitMEX , the world's most secure cryptocurrency derivatives exchange, today released its annual research report, "The State of Crypto Perpetual Contracts 2025." The report outlines five key insights that define a turbulent year for the global cryptocurrency derivatives market.
The report provides an in-depth analysis of how structural stress, liquidity shocks, and the failure of trading strategies that were once considered "reliable" reshaped the perpetual contract market in 2025.
According to the report, the most significant event this year was the market crash of October 10-11, which triggered a chain of liquidations estimated at around $20 billion. BitMEX's analysis shows that automatic liquidation (ADL) mechanisms triggered by multiple exchanges disrupted risk-neutral strategies, forcing professional market makers to drastically reduce liquidity. This led to order book depth falling to its lowest level since 2022.
"2025 is a turning point, where market structure has a greater influence than market direction," said BitMEX CEO Stephan Lutz. "The events of October showed that even well-established, historically neutral strategies can fail when an exchange's risk engine is under pressure. Market resilience now depends on transparent systems and rigorous risk management."
The report also points out that funding rate arbitrage, once considered a reliable source of passive income, has become increasingly crowded. With the expansion of exchange-native risk-neutral products, funding rates have narrowed significantly; by mid-year, their yields had fallen to around 4%, often lower than the prevailing U.S. Treasury yield.
Beyond market mechanisms, the report also highlights the widening trust gap between fair-matching exchanges and so-called "B-Book" platforms (betting platforms). BitMEX researchers observed multiple incidents where profitable traders faced order cancellations or account restrictions under "abnormal trading" terms. This further underscores the importance of understanding counterparty risk.
"Where traders choose to execute trades has become just as important as the strategy itself," Lutz said. "As the derivatives market matures, participants are starting to demand that trading venues prioritize fair matching, clear rules, and accountability, especially during periods of market stress."
The report also examines the rise of perpetual decentralized exchanges (Perp DEXs), noting that while innovation has increased, new vulnerabilities have also emerged, such as targeted liquidation attacks and oracle manipulation. Meanwhile, BitMEX has identified emerging product categories, including equity perpetual contracts and funding rate trading, marking the ongoing evolution of the derivatives space. Earlier this week, BitMEX launched Equity Perps, providing traders with 24/7 access to trade 10 US stocks and indices.
Looking ahead, BitMEX believes the era of easy profits is over, but innovation in product design and market structure is accelerating. The company anticipates continued convergence between the crypto and traditional markets, with derivatives increasingly being used as a tool for accessing global assets around the clock.
The full report, "Current Status of Cryptocurrency Perpetual Contracts in 2025," can be found on the BitMEX official blog.
About BitMEX
BitMEX is a pioneering exchange for crypto derivatives trading, providing a platform that meets the needs of professional cryptocurrency traders through low latency, deep crypto-native liquidity, and unparalleled reliability.
Since its inception, BitMEX has never lost any cryptocurrency due to intrusions or hacking attacks, allowing BitMEX users to trade with peace of mind, confident that their funds are safe. At the same time, BitMEX also ensures that they have access to the necessary products and tools to profit.
BitMEX was also one of the first exchanges to publish on-chain proof-of-reserve and proof-of-liability data. The exchange has consistently published this data twice a week to demonstrate that they securely store and segregate the funds under their custody.
For more information about BitMEX, please visit the BitMEX blog or www.bitmex.com, and follow us on Telegram and our online community. For further inquiries, please contact press@bitmex.com .
