Get Rich or Get Wiped Out: Bitcoin’s Hottest New Trade
September 24, 2025
The market for cryptocurrencies is known for boom-and-bust trades. It is about to get even wilder.
Traders seeking rapid returns have made a speculative bitcoin play one of the most popular crypto bets globally: so-called perpetual futures. These potentially offer returns of 10, 20 or even 100 times an initial investment—or huge losses that could leave a trader with nothing.
Known as perps, the contracts give traders access to extreme leverage and have exploded in popularity during a rally that has sent bitcoin prices up more than 70% over the past year. Though popular in other parts of the world, perps were largely unavailable until recently to U.S. traders on regulated venues.
Their emergence is a sign that financial markets, which have steadily grown riskier since 2020, will likely keep growing more speculative. Although U.S. stock indexes keep hitting records and a host of other assets are richly valued, many traders are enthusiastic about making ever-bigger bets.
So far, the exuberance shows no signs of slowing. Individual traders have helped drive up shares of everything from Opendoor Technologies, the penny meme stock that zipped to $10 within weeks, to speculative crypto-buying machines such as Bitmine Immersion Technologies and Strategy.
People are so eager to gamble on sports, crypto and stocks that Wall Street has introduced new flavors of one-day options and prediction-market bets to individuals. More are on the way.
Perps made up around 68% of bitcoin trading volume in 2025, according to Adam Morgan McCarthy, head of research at analytics firm Kaiko. Here’s how they work:
The instruments are derivatives, but unlike traditional contracts lack expiration dates or so-called “strike prices,” at which contracts can be exercised. Gains or losses are based on bitcoin’s moves; the trades are akin to options that automatically roll further and further out in time.
For example, a trader might open a bullish position in perps with $500. She gets 10 times leverage, which means she controls $5,000 worth of bitcoin. If bitcoin prices jump by 10%, her initial investment doubles. She just made $500. Of course, a 10% price drop means she is wiped out.
When perps are trading at higher levels than the spot price, those holding long positions, meaning they are bullish on bitcoin, regularly pay something called a funding rate to the counterparty on the derivative. This is designed to keep the prices of futures and underlying bitcoin prices linked. These can eat away at profits, depending on how high they are. Those who are short the contracts can receive the funding rate.
The bets can be big moneymakers for those hosting the trades.
At brokerages such as Robinhood, options and crypto trading are far more lucrative than plain-vanilla stock trading. Crypto and options trading drove almost 80% of the brokerage’s transaction-based revenues in the second quarter. Stocks made up just 12% of such revenues.
Robinhood recently started giving retail traders in Europe access to the trades. A frenzy of trading has helped send the stock up more than 200% this year, vaulting it into the S&P 500 this month.
Meanwhile, Cboe Global Markets is planning to launch perps in November, Catherine Clay, global head of derivatives at the company, told attendees at Robinhood’s recent HOOD Summit in Las Vegas.
Crypto company Gemini offers perps that provide leverage of 100 times the initial investment abroad.
Mainstream brokerage Coinbase introduced its retail clients to perps this summer. Scott Shapiro, its head of trading, said the platform isn’t limiting itself to leverage of 10 times the initial investment. “I don’t think that’s a lifetime, forever limit,” Shapiro said. “We want to just keep pushing that envelope forward.”
As with so many other speculative endeavors, the house might turn out to be the real winner.
Write to Gunjan Banerji at gunjan.banerji@wsj.com
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