Summary: Perpetual futures, or perps, are futures contracts with no expiry date, kept close to the spot price by a funding rate that longs and shorts pay each other. Traders like them because they can go long or short around the clock, with leverage and no contract to roll. The main risk comes from high leverage and automatic liquidation when margin runs out. For traders who want to get funded, the alternative is CME Micro Bitcoin and Micro Ether futures, traded with a funded account at Phidias Propfirm.
Perps are hard to miss in 2026, from crypto exchanges to on-chain venues and now regulated US markets. This guide explains how they work and what they really cost. It then shows a more professional way to trade the same bitcoin and ether moves.
What are perpetual futures?
A perpetual future, also called a perpetual swap or simply a perp, is a derivative contract that tracks an asset such as bitcoin but never expires. You go long or short, post collateral called margin and keep the position open as long as that margin covers your losses and costs.
The name explains the design. A classic futures contract expires, and its price converges with the underlying asset as expiry approaches. A perp never expires, so it needs another anchor: the funding rate, a periodic payment between longs and shorts. Those recurring payments are why the product is also called a swap.
Spot is different. Buy bitcoin outright and you own the coin, with no funding and no liquidation. A perp only gives you a contract whose profit and loss follow the price, usually with leverage.
The Wikipedia entry on perpetual futures and an overview from Cornell’s SC Johnson College of Business describe these core mechanics. For a deeper side-by-side, read our guide to perps vs futures. If derivatives are new to you, start with what futures trading is.
How does the funding rate work?
The funding rate keeps a perp anchored to spot. Each venue builds a reference price from spot markets, usually called the index price. When the perp trades above it, funding is positive and longs pay shorts. When it trades below, funding turns negative and shorts pay longs. Payments are exchanged periodically, commonly every 1 to 8 hours depending on the venue.
The incentive does the work. When the perp trades at a premium, longs pay to hold and shorts get paid. Arbitrage traders sell the perp, buy spot and collect the funding, which pulls the two prices back together.
A simple example: imagine you are long a $10,000 bitcoin perp and funding is positive at 0.01% per period (a round number for illustration, not a venue quote). You pay $1 to the shorts at each funding time. With funding settled every 8 hours, that is $3 a day and $90 over 30 days, even if the price never moves. On $1,000 of margin, that $90 is 9% of your capital.
Note that funding is charged on the full position rather than on your margin, so leverage magnifies its impact. The rate can also change every period.
How do leverage and liquidation work on perps?
Perps trade on margin. You post initial margin and control a much larger position. Very high leverage is common on crypto venues. If losses push your collateral below the maintenance margin, the venue’s liquidation engine closes the position automatically.
Take that $10,000 position opened with $1,000 of margin, which is 10x leverage. A 10% move against you would wipe out the margin. In practice, liquidation comes earlier, at the maintenance level. Funding payments also drain margin, so a long hold can bring the liquidation price closer in a flat market.
Liquidations can cascade. A forced liquidation hits the market at whatever price is available. When many traders are leveraged on the same side, the first liquidations push the price into the next group’s levels, and the spiral feeds itself. Positions that looked safe moments earlier get closed near the extreme of the move.
Why are perps everywhere in 2026?
Perps grew up on crypto-native exchanges, then moved on-chain. A perp DEX is a decentralized exchange where perpetual futures trade through smart contracts, with collateral deposited from the trader’s own wallet. Funding, leverage and liquidation work much the same way.
The bigger shift happened in the United States. In late May 2026, the CFTC approved Kalshi to list BTCPERP, a bitcoin perpetual futures contract. It also gave Coinbase a no-action letter so US clients can access perps routed through Coinbase Bermuda as “foreign futures”, according to CoinDesk. CFTC Chairman Mike Selig said: “Having true perpetual contracts in the United States is a major step forward…” On September 10, 2026, Kalshi added perps on gold and silver after CFTC approval, according to CNBC.
What are the hidden costs and risks of perps trading?
The headline fee is rarely the full cost of perps trading. Watch these four risks before you size a position.
- Funding adds up. On a crowded trade, the popular side keeps paying for as long as it holds, even while the price moves its way.
- Liquidation does not wait. A brief wick can close a leveraged position at a poor price. With cross margin, the rest of your balance can be drawn in.
- Venue risk is real. On a centralized exchange, your collateral sits with the venue. On a perp DEX, you take on smart contract risk instead.
- Leverage is a temptation. When very high leverage is one click away, position size stops being a plan.
Some prop firms now fund crypto perps traders. To compare them, see which prop firms offer perpetual futures and which is best for you. Before choosing one, read our review of a crypto perps prop firm. For a wider view of crypto strategies, see our guide on how to make money trading crypto.
The professional alternative: CME Micro Bitcoin and Micro Ether futures
Dated futures on a regulated exchange give you bitcoin and ether exposure with no funding rate. CME Micro Bitcoin futures (MBT) represent 0.1 bitcoin, and Micro Ether futures (MET) represent 0.1 ether. Since May 29, 2026, CME Group’s cryptocurrency futures and options have traded 24/7, ending the weekend “CME gap” (CoinDesk).
These contracts expire. A dated future converges with the underlying price at expiry, so it needs no funding rate. To hold past expiry, traders roll: they close the expiring contract and reopen the position in the next contract month. Intraday traders, flat by the end of the day, rarely need to roll.
This is where Phidias Propfirm fits: MBT and MET are authorized products. An Express to Live account has a static drawdown that never trails, no consistency rule, no minimum trading days and no daily loss limit. Pass the evaluation and reach the same profit target again on the funded CASH account. The Express to Live rule is simple: the first payout converts the account to a real LIVE account.
To be transparent: Phidias evaluation and CASH accounts are simulated, and the LIVE account trades real money. Express to Live and Fundamental accounts must close positions before the end of the day, while Premium allows overnight and weekend holds. Commissions are listed on the Phidias rules page and summed up in the table below.
Crypto perps vs CME crypto futures (MBT/MET) traded with a Phidias account
Here is the side-by-side, with Phidias details as of October 3, 2026.
| Feature | Crypto perps | CME crypto futures (MBT/MET) with Phidias |
|---|---|---|
| Expiry | None | Dated contracts, rolled to the next contract month |
| Price anchor | Funding rate between longs and shorts | Convergence with the underlying price at expiry |
| Typical venue | Crypto exchanges, perp DEXs and, since 2026, Kalshi in the US | CME Group, via Tradovate, NinjaTrader or Rithmic |
| Regulation of the venue | Varies by venue and jurisdiction | Regulated US exchange |
| Contract size | Set by each venue | MBT 0.1 bitcoin, MET 0.1 ether |
| How losses are limited | Liquidation engine closes the position when margin runs out | Fixed static drawdown known in advance ($500 on a 25K E2L account) |
| Trading hours | 24/7 | 24/7 since May 29, 2026; E2L and Fundamental close by end of day, Premium can hold overnight and over weekends |
| Costs | Funding payments plus trading fees | Commission per side on Tradovate: MBT $1.55, MET $0.50 (indicative); no funding |
| Access to prop funding | Depends on the program and its terms | E2L path: evaluation, funded CASH (simulated), then a real LIVE account |
Take action with Phidias Propfirm
CME Micro Bitcoin and Micro Ether futures give you the markets that perps made popular, on a regulated exchange and with no funding rate. With a Phidias account, you also know your maximum drawdown before your first trade. As of October 3, 2026, an Express to Live account starts at $69.25 for the 25K size (list price $277). It is a one-time payment using the public discount code shown on the site, so there is no activation fee and no monthly fee. Our guide on what 5 Express to Live accounts can pay explains the rewards, and the accounts page lists every size.
Trading futures involves substantial risk of loss, and most traders do not pass evaluations. If you want to test your edge on crypto futures with a fixed drawdown and a real path to LIVE, start with Phidias Propfirm.
Frequently Asked Questions
What is a perp in simple terms?
A perp is a futures contract with no expiry date. A funding rate paid between longs and shorts keeps its price close to spot.
Who pays the funding rate on perpetual futures?
When the perp trades above spot, longs pay shorts. When it trades below spot, shorts pay longs. Payments are commonly exchanged every 1 to 8 hours, depending on the venue.
Can US traders trade perps in 2026?
Access is opening up. In late May 2026, the CFTC approved Kalshi’s BTCPERP and gave Coinbase a no-action letter for perps routed through Coinbase Bermuda. Kalshi then added gold and silver perps on September 10, 2026.
What is a perp DEX?
A perp DEX is a decentralized exchange where perps trade through smart contracts, with collateral deposited from your own wallet. It removes the exchange operator but adds smart contract risk.
Can I trade bitcoin futures with a prop firm instead of perps?
Yes. Phidias Propfirm authorizes CME Micro Bitcoin (MBT) and Micro Ether (MET) futures, with a path from evaluation to a real LIVE account. Evaluation and CASH accounts are simulated.
Risk disclaimer: Trading futures and crypto derivatives involves substantial risk of loss and is not suitable for everyone. Most traders do not pass evaluations. Phidias evaluation and CASH accounts are simulated, while the LIVE account is a real account. This is not investment advice. Prices, rules and commissions are as of October 3, 2026 and may change.
