How a Chance Encounter on a Hong Kong Hike Revolutionized Crypto Trading

In 2015, a hike in Hong Kong's countryside led to the creation of the perpetual swap, a groundbreaking financial product that would change the face of crypto trading forever. Ben Delo, BitMEX co-founder and mathematician, was on this hike with friend and derivatives trader Bavik, grappling with a persistent issue that had been plaguing him for months. BitMEX had experimented with various futures contracts, but customers continued to express frustration over positions closing unexpectedly. They desired a product that mimicked spot trading but offered the leverage of derivatives. Delo's query, "What if a future never expired?" sparked a pivotal conversation. Bavik's response, "Mathematically, it would be worth infinity," highlighted the technical challenge. However, Bavik proposed a solution: charge traders the bitcoin overnight rate, similar to LIBOR in traditional finance. This concept laid the foundation for the perpetual swap, which would become a cornerstone of crypto trading. The story of BitMEX's evolution, from its inception to its current status as a leading crypto exchange, is deeply intertwined with the development of this innovative product. By understanding the needs of its customers and adapting to the market, BitMEX created a game-changing financial instrument that has attracted the attention of traditional finance regulators and is poised to leave a lasting impact on the world of trading.