BitMEX has just dropped its end-of-year manifesto, 'State of Crypto Perpetual Swaps 2025,' and the verdict is in: the era of effortless perpetuals yields has officially been put out of its misery. The exchange's research serves up five key insights from a turbulent year in crypto derivatives, a period dominated by structural stress, liquidity shocks, and the collapse of once-reliable trading plays that now look about as sturdy as a house of cards in a hurricane.
The year's main event was the Oct. 10-11 market meltdown, which triggered an estimated $20 billion in liquidations. BitMEX's analysis shows that auto-deleveraging mechanisms across multiple exchanges threw a massive wrench in delta-neutral strategies, forcing professional market makers to retreat faster than a degen realizing they've been trading on a B-Book, leaving order books thinner than they've been since the dark days of 2022.
'2025 marked a turning point where market structure mattered more than market direction,' said BitMEX CEO Stephan Lutz. 'The events of October showed that even sophisticated, historically neutral strategies can fail when exchange risk engines are stressed, and that resilience now depends on transparent systems and disciplined risk management.'
The report also confirms that funding rate arbitrage, once the go-to for passive yield, has become a crowded trade. As exchange-native delta-neutral products expanded, funding rates compressed sharply, with yields falling toward 4% and often dipping below U.S. Treasury rates by mid-year, proving that even the most reliable arbitrage can get squeezed into oblivion.
Beyond the mechanics, a growing trust divide is highlighted between fair matching exchanges and so-called B-Book platforms. BitMEX researchers noted multiple incidents where profitable traders faced trade reversals or account restrictions under 'abnormal trading' clauses, reinforcing the importance of understanding counterparty risk, because nothing says 'fun' like your winning trade getting yeeted into the void.
'Where traders choose to execute has become as important as the strategy itself,' Lutz added. 'As derivatives markets mature, participants are demanding venues that prioritize fair matching, clear rules, and accountability, particularly during periods of market stress.'
The report also touches on the rise of perpetual decentralized exchanges, noting increased innovation alongside new vulnerabilities like targeted liquidation attacks and oracle manipulation. At the same time, BitMEX identifies emerging product categories, including equity perpetuals and funding rate trading, as signs of continued evolution in the derivatives landscape. Earlier this week, BitMEX launched Equity Perps, giving traders 24/7 access to 10 US stocks and indices, because why sleep when you can trade stocks at 3 AM?
Looking ahead, BitMEX concludes that while the era of easy yield has ended, innovation in product design and market structure is accelerating. The firm expects continued convergence between crypto and traditional markets, with derivatives increasingly used to access global assets on a 24/7 basis. The full report is available on the BitMEX blog, for those who enjoy reading about market pain in excruciating detail.
