Aren't stocks used as fuel; are perpetual contracts the rocket engine of this wave of shady bull markets?
The 2025 crypto bull market can (already) arrive, but the way its engine roars is very different from what it used to be. If you're still keeping an eye on spot trading volume to determine how hot the market is, you've probably only seen the tip of the iceberg. The real protagonist of this bull market is Perpetual Contract Perps — a huge, highly leveraged PVP arena driven by intense games between long and short. The liquidity, narrative, and wealth effects here are defining the entire market in ways never before.
Why is liquidity concentrated in the contract market in an unprecedented manner, and a digital case was used to reveal how “short liquidation” became rocket fuel and the core mechanism driving the spiral rise in asset prices.
Disclaimer: It's all nonsense; if there are any similarities, it's just a coincidence.
Entertainment statement: Just take it easy, don't be too serious
Serious statement: If you think I'm wrong, then you're right.
1. Data perspective: When the “tail” starts to shake the “dog”
Phenomena is the best proof of theory. We first use data to verify an amazing fact: the trading volume of perpetual contracts has completely crushed the spot market.
Trading volume comparison: According to data from data platforms such as TokenInsight in the second quarter of 2025, the volume of crypto derivatives (mainly perpetual contracts) trading volume on mainstream exchanges is usually 10 to 15 times that of spot trading. This means that when the spot market has a transaction volume of 10 billion US dollars, the contract market's transaction volume may have reached 100 billion to 150 billion US dollars.
Open Interest (Open Interest): Looking at the volume of open contracts in mainstream currencies such as BTC and ETH, as well as popular new coins, we can see that their size far exceeds the spot stock of the corresponding currency on the exchange. This indicates that the vast majority of market participants' risk exposure and capital are deployed on the derivatives side.
Funding Rate (Funding Rate): Funding rates remained positive and high for a long time during most of this bull market. This has attracted a large number of “arbitrators” to earn stable capital rates through the strategy of “shorting perpetual contracts + buying equal amounts of spot”. This part of the operation further removes liquidity from the spot market and locks them into hedging positions.
Conclusion: The data clearly shows that there has been a structural shift in the market's capital, attention, and gaming focus. Perpetual contracts are no longer attached to the stock; instead, they have become the core battleground that dominates short-term price fluctuations. The market has changed from “spot-driven contracts” to “contract games that force spot”.
“At this moment, the stock has actually become an 'accessory item'.”
2. Demystifying the core mechanism: How was the “empty stock rocket” launched?
A “strange phenomenon” in the market — price increases do not begin with spot purchases, but are driven by liquidation on the contract side. This is the core mechanism of this round of “Perps Bull Market.”
Let's explain this process with a simplified digital case.
Case: New currency “RocketCoin” (RKT)
Background settings:
RKT is a hot new project with extremely low initial circulation, with only 1 million units (1/10) on the market. (Assuming total circulation is 10 million pieces)
The exchange launched RKT's U-standard perpetual contract.
Current spot price: $10.
Due to the “consensus” that “the new currency should be empty”, the contract market has accumulated a large number of short positions. Let's say between $11 and $15, there are $10 million worth of empty orders (300,000 RKT) waiting to be liquidated.
Launch process:
Initial ignition: A giant whale or project party invests a small amount of money in the spot market, such as using 200,000 US dollars to buy 20,000 RKT to forcibly push the spot price from $10 to $11. Due to low circulation volume (shallow market), the cost of boosting the spot market is extremely low.
Tier 1 rocket falls out (first round of liquidation): The RKT price hit $11, and the first batch of short positions with a stop loss at this price was forcibly closed (that is, liquidated). Let's say this batch of positions is worth $1 million.
Clearing mechanism: The operation of “clearing out an empty order” is a “buy”. The clearing engine needed to buy an RKT contract worth $1 million on the market immediately.
Market maker hedging: Market makers that provide liquidity for the clearing engine will immediately go to the spot market to buy an equal amount of RKT spot to hedge in order to avoid the risk of exposing themselves to short positions.
Price feedback: This spot purchase from market makers further boosted already thin spot prices, such as from 11 to 12.
Level 2 rocket ignition (chain liquidation): The spot price reached $12, triggering a new batch and larger bursting of short positions. This process perfectly repeats the second step: contract liquidation -> market makers buy spot hedging -> spot prices rise further.
Getting on track: This cycle goes back and forth, creating a positive liquidation spiral. Every layer of short positions is fueling the next round of price increases, driving RKT's price all the way from $11 to $15 or more. In this process, the initial “ignition” capital of 200,000 US dollars leveraged passive purchases of millions or even tens of millions of dollars.
Conclusion: This is the essence of a simple version of the “Perps Bull Market”: using extremely low spot liquidity as a fulcrum of leverage, creating counterorders (large numbers of shorts) in the contract market, and ultimately using the “liquidation” mechanism as an engine to drive prices to rise in what appears to be a “vacuum”. The rise in spot prices is more like the result and performance of this process than the cause. (Obviously, this is not such an easy operation in practice)
3. Why “this version”? Time, place, people and
This phenomenon, which was less pronounced in previous cycles, is the result of a combination of factors:
Tianshi (Project Party Strategy): Projects in this cycle generally use the “Low float, High FDV” distribution model. This creates the perfect “necessary and sufficient conditions” for humans to control the spot market and leverage the highly leveraged contract market.
Geographic advantage (market infrastructure): The perpetual contract product itself is extremely mature after years of development. The smooth trading experience, deep liquidity, and perfect API and market maker system enable it to carry massive amounts of capital and complex games.
Humanity (Market Consensus and Narrative):
The “empty new coin” paradigm: This rendered “consensus” has actively created a large amount of “fuel” for the market.
The myth of getting rich: The propaganda of contract giants, which can easily earn hundreds of times more, continues to attract players who want high risk and high rewards to enter the market. In particular, using the extreme trading operations of the giant whales on Hyperliquid, this “getting rich (negative)” narrative gave plenty of room for imagination.
The temptation of the mechanism: Complex gameplay such as fund rate arbitrage, clearing and order grabbing, etc., has transformed the market from a simple long and short duel to a multi-character, multi-dimensional financial game, further locking in liquidity.
epilogue
Everyone, don't take it seriously. This round is a “Perps bull market,” which is just a “joke” of deep structural changes in the market. Although it means a story of wealth growth, it is more about a complex financial fable about the game of leverage, liquidity, mechanisms, and human nature than a simple discovery of value.
In this version, spot goods have become the ultimate embodiment of hedging products and prices, and perpetual contracts are the core carrier that integrates narrative, capital, and mechanism to truly define the pulse of the market. Understanding and adapting to this “use your bursts as fuel” game rules is the key to getting through this cycle.
This is the case with finance or gaming; PVP always brings new experiences.
May we always be in awe of the market.
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