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PERPS

Crypto markets have good reason to go crazy again as perpetual futures go mainstream in the US

Institutions helped calm the crypto market, and are now helping to enhance volatility once again.

10/13/25 9:03AM

As bitcoin matured as an asset class, institutional adoption led to the cryptocurrency behaving more like other risky financial assets.

Now, the rising US popularity and institutional adoption of another financial innovation threatens to undo some of that progress by providing a vehicle where short-term volatility can quickly snowball, leading to a cascade of position closures.

At its most basic level, it’s the same old form of the most common reason for dramatic price swings: leverage.

The eyebrow-raising timing of the more than $1 billion in short positions initiated in bitcoin and ethereum (which came shortly before President Donald Trump announced his intention to impose a 100% tariff on Chinese imports above existing measures) is one thing. The manner in which this bet was made — through perpetual futures, which provided more than 10x leverage for this bet — is quite another.

Perpetual futures are indeed the hottest trade in crypto, as well documented by The Wall Street Journal, accounting for nearly 70% of bitcoin trading volume this year, per one estimate.

As the name implies, these are futures contracts that never expire. In order to keep prices close to what the underlying asset says they “should” be, the holders of long contracts pay their counterparts who are short a “funding rate” periodically if the price is above the spot price, or vice versa if below.

The amount of leverage on offer for those utilizing these products is eye-popping. BitMEX, for instance, advertises up to 250x leverage on its perpetual futures contracts.

Leverage means you can make or lose a lot of money quickly. In the aftermath of Trump’s plan to hike tariffs on China, it was more of the latter. Per CoinGlass, total liquidations across the crypto space in a 24-hour span were north of $19 billion on Friday evening, making this the top liquidation event of all time.

The rise of long-term oriented holders of cryptocurrencies in corporate treasuries and structure option-selling programs had helped calm bitcoin volatility (compared to that of stocks) significantly since the depths of its bear market in 2018.

Institutional adoption giveth, and other institutional innovation taketh away. Coinbase, for instance, launched US perpetual-style futures in July, an announcement that seemingly kickstarted a wave of American interest in the asset class.

(Robinhood is among the institutions that offer access to trading perpetual futures in Europe. Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

If there’s one thing that I think describes modern trading psychology, it’s an extreme search for asymmetry. People (especially younger people, of which I once was) flock toward opportunities to make a lot of money quickly, whether that’s through options, parlays, or, in this case, perpetual futures.

This episode underscores one obvious truth regarding asymmetry: the vehicles that are seemingly the most conducive to multiplying your principal many times over are also the ones most likely to see it zero’d.

Matt Phillips60m

Intuit, Workday jump amid Iran war fueling flight-to-software trade

Cash flow-positive software companies — the same ones that were seen as doomed to obsolescence by AI a few weeks back — jumped Thursday, with Oracle, Workday, Intuit, and Salesforce staying above water despite the general downtrend in the big indexes.

Some of the uptick is likely linked to the better-than-expected weekly jobless claims numbers that came in early today, which eased concerns about a recession brought on by the most recent monthly employment report. (Payroll-processing stocks like Paycom Software, Paychex, and Automatic Data Processing are clearly breathing a sign of relief.)

And given that these software companies often have a “seat-based” revenue model, the fact that human butts are not rapidly being replaced by AI-enhanced robot keisters gives them a lift as well.

Also as we’ve said before, amid the chaos and uncertainty of the Iran war, the steady cash flows and predictable short-term outlook of software-as-a-service stocks have a definite appeal.

Even if you think that over the long term AI will end up slaughtering these cash cows, that’s a problem for a day perhaps three to five years in the future, whereas the Iran war is a growing risk investors increasingly can’t ignore today.

Matt Phillips2h

Rocket Lab slips with other momentum stocks despite DOD hypersonic test deal, new analyst “buy” call

Rocket Lab slipped early Thursday along with other momentum stocks, despite announcing a new $190 million deal for 20 tests of hypersonic rockets for the Department of Defense and picking up a new bullish analyst call.

The commercial space launch company called the deal to launch 20 hypersonic test flights over a four-year period in collaboration with Kratos Defense its “single largest launch agreement yet.”

Separately, analysts at brokerage firm Clear Street initiated coverage of Rocket Lab with a “buy” rating and an $88 price target — essentially the same as Wall Street’s $88.38 consensus, according to FactSet. That implies upside of about 27% for the stock compared to yesterday’s close. Clear Street analysts wrote:

“Despite shares rising 289% (vs. 26% for the NASDAQ) over the past year, we see further upside. Our $88 target is based on 20x 2030E EV/Sales, in line with the ~30x NTM EV/Revenue average over the past year when discounted to present value. We anchor on 2030E to capture the payoff from ~16 annual Neutron launches following a multi-year investment cycle. Our outlook incorporates estimated dilution and proceeds from the $1B equity distribution agreement announced on 3/17/2026.”

The favorable headlines for Rocket Lab weren’t enough to help the shares overcome a general downdraft for high-beta momentum stocks such as itself. They are getting hammered early on the deteriorating situation in the Mideast war.

Rocket Lab wins $190 million Pentagon deal for hypersonic test flights

“Despite shares rising 289% (vs. 26% for the NASDAQ) over the past year, we see further upside. Our $88 target is based on 20x 2030E EV/Sales, in line with the ~30x NTM EV/Revenue average over the past year when discounted to present value. We anchor on 2030E to capture the payoff from ~16 annual Neutron launches following a multi-year investment cycle. Our outlook incorporates estimated dilution and proceeds from the $1B equity distribution agreement announced on 3/17/2026.”

Max Knoblauch3h

Uber will invest $1.25 billion in Rivian in a new robotaxi deal

EV maker Rivian surged more than 9% in premarket trading on Thursday following an announcement that Uber will invest up to $1.25 billion in the company through 2031 as part of a robotaxi partnership.

The deal will begin with an initial $300 million investment, and Uber will purchase 10,000 autonomous versions of the R2. Uber will have the option to buy 40,000 more in 2030.

The R2 is Rivian’s smaller, less expensive model and is set to roll out to buyers in the second quarter of this year.

Per a company filing on Thursday, Rivian “no longer expects to be adjusted EBITDA positive in 2027 due to an expected increase in R&D spend associated with the acceleration of its autonomy roadmap.”

Uber, which has more than 20 autuonomous vehicle partnerships ranging from Alphabet’s Waymo to Baidu, has become a dominant robotaxi force.

Rivian had first hinted at robotaxi plans at its Autonomy and AI Day in December.

Uber to invest up to $1.25 billion in EV maker Rivian in deal to launch 50,000 robotaxis

The R2 is Rivian’s smaller, less expensive model and is set to roll out to buyers in the second quarter of this year.

Uber, which has more than 20 autuonomous vehicle partnerships ranging from Alphabet’s Waymo to Baidu, has become a dominant robotaxi force.

Rivian had first hinted at robotaxi plans at its Autonomy and AI Day in December.

Hyunsoo Rim, David Crowther

Oil and gas prices jump, stocks slide, after Middle East strikes hit key energy infrastructure

Attacks on Iranian and Qatari energy facilities pushed Brent to $118, as Defense Secretary Pete Hegseth offered no deadline on an end to the war in a press conference.

J. Edward Moreno4h

Lilly reports encouraging trial results for its next-gen GLP-1 shot

Eli Lilly released late-stage trial results for its next-generation GLP-1 shot, retatrutide, showing the drug helped patients lose more weight than anything currently on the market.

Patients taking the highest dose of retatrutide, 12 milligrams, lost 16.8% of their body weight after 40 weeks, more than its current bestseller, tirzepatide. The results also showed significant reduction in blood sugar levels.

The stock was flat in premarket trading following the news.

Lilly’s tirzepatide, sold under the brand names Zepbound and Mounjaro, is currently the most sold drug in the world. The company’s sales have now outpaced its top rival, Novo Nordisk, which was the first to bring a GLP-1 to market but has seen sales decelerate as competitors have muscled in.

Still, some expect Lilly’s winning streak may not last forever. Analysts at HSBC gave the stock a rare downgrade earlier this week, citing a crowded market, among other factors.