The Birth of a Revolution: How a Hong Kong Hike Changed Crypto Trading Forever

In 2015, a hike in Hong Kong's countryside marked the beginning of a groundbreaking concept in cryptocurrency trading. Ben Delo, BitMEX's co-founder and a skilled mathematician, was on a hike with his friend Bavik, a derivatives trader, when he posed a question that would change the course of crypto history: 'What if a future never expired?' The answer to this question led to the creation of the perpetual swap, a financial product that would go on to revolutionize the world of cryptocurrency trading. Initially, the concept was met with skepticism, but Delo was determined to bring it to life. He built the perpetual swap from scratch, and by May 2016, it was launched on the BitMEX platform. The core mechanism was simple: a futures contract with no expiry date, anchored to the spot price through a daily funding rate. This innovative product allowed traders to buy and sell with leverage, without the need for traditional expiry dates. The impact was immediate, with the perpetual swap becoming a huge success and attracting a large following of traders. As the product's popularity grew, so did its influence on the wider cryptocurrency market. The perpetual swap's success can be attributed to its ability to provide a more efficient and liquid market for traders. By offering a single product, traders were able to consolidate their liquidity, resulting in a more liquid market with tighter spreads. The success of the perpetual swap also drew the attention of competitors, with many attempting to replicate the product. However, few were able to fully understand the intricacies of the funding rate mechanism, which was the key to the perpetual swap's success. Today, the perpetual swap is a staple of the cryptocurrency trading landscape, with many major exchanges offering their own version of the product. The success of the perpetual swap has also attracted the attention of traditional finance regulators, with the CFTC reportedly making room for perpetual swaps under its framework. As the cryptocurrency market continues to evolve, it will be interesting to see how the perpetual swap adapts and changes to meet the needs of traders. One thing is certain, however: the perpetual swap has left an indelible mark on the world of cryptocurrency trading, and its influence will be felt for years to come.