The inside story of how a hike in Hong Kong changed crypto trading forever
In 2015, BitMEX co-founder Ben Delo and a trader friend solved a problem with short-dated bitcoin futures: users wanted leveraged exposure that behaved like spot and did not keep expiring. The answer became the perpetual swap, a futures contract with no expiry that stays near spot through a funding rate paid between longs and shorts. BitMEX first tied funding to external bitcoin lending markets, but rising demand for longs in 2016–17 pushed the swap into a persistent premium. BitMEX then shifted to a dynamic funding system based on the contract’s own premium or discount over spot, creating an equilibrium that market makers could arbitrage back toward spot. This design concentrated liquidity into one product, helped make BitMEX the leading bitcoin price-discovery venue, and was copied across crypto exchanges.
