Ask most people how a crypto price gets set and they will describe spot trading: buyers and sellers meet on an exchange, and the last trade prints the price. But that has not been how it actually works for years as far as bitcoin, ether and the broader crypto markets are concerned.
Perpetual futures, also called perpetual swaps or “perps” for short, are leverage-friendly contracts that never expire, and they now account for roughly 93% of all crypto futures volume, with daily perp volume routinely running larger than the spot market underneath it.
A traditional futures contract has a settlement date, which is when it comes due and its price is forced to meet the spot price of the thing it tracks, also called the underlying. But a perpetual has no such date and can be held indefinitely (by paying a cost known as ‘funding rate,’ which varies daily).
A body of market-microstructure work has asked which venue “discovers” a bitcoin price first, meaning where new information enters the market before it shows up anywhere else. The answer has repeatedly come back pointing at derivatives.
A study in the Journal of Financial Markets by Carol Alexander and co-authors found that perpetual swaps on unregulated venues were the strongest instruments for bitcoin price discovery, with regulated futures and U.S. spot exchanges reacting to, rather than leading, those moves.
Other work has identified Binance’s perpetual market as the primary source of price formation across the fragmented crypto landscape.
The evidence is not conclusive, however, and some studies find spot still leads at certain frequencies or during stress. But the direction of the literature over the past few years has been toward the derivatives market as the place where the price is made.
“Historically, we have seen perps leading mostly during bear market price rallies,” Julio Moreno, head of research at CryptoQuant, told CoinDesk. “For example, Bitcoin perps demand growth (blue bars in the chart) led the price rallies of January 2026, and April-May 2026.”
“In these periods, spot demand was contracting, while perps demand expanded, thus the perpetual futures market was leading prices despite demand contracting on the spot market,” he said.
Which brings us back to the funding rate. Because a perpetual contract never settles, nothing forces its price back toward spot the way an expiry date does for a traditional future. Instead, every few hours, whichever side of the trade is crowded pays the other.
When the perp trades above spot, traders who are long (or betting on higher prices) pay those who are short (betting on lower prices), which nudges the contract back toward the underlying price.
The funding rate is both the tether that keeps the contract anchored and a live readout of sentiment, which is why some traders watch it as closely as price.
“We actually surveyed more than 100 of our traders,” Hong Yea, co-founder at onchain trading platform Grvt, told CoinDesk. “The traders who actually rely on us to hold real conviction positions want predictability there, not another data point to interpret.”
“If you’re holding a directional position for weeks, funding isn’t telling you something new about the market, it’s just eating into your PnL while you wait to be right. That’s the honest way our users describe it to us, not, ‘what is the market telling me,” Yea added.
The SpaceX use case
None of this requires a spot market to exist. And for about three weeks in May and June, one of the most-watched markets in the world was for a company that had never sold a public share was running on crypto rails.
Elon Musk-owned SpaceX priced its record $75 billion initial public offering at $135 a share and began trading on the Nasdaq on June 12. Well before that, traders on Binance, Coinbase, Hyperliquid and others were already buying and selling exposure to the company through pre-IPO perpetual futures, or contracts structured to track an implied valuation rather than a share price.
The first mover was Hyperliquid, the onchain derivatives exchange, where a synthetic SpaceX perpetual went live on May 18. Binance opened its own SpaceX market on May 21, Coinbase followed on June 4, and BitMEX, Bitget and OKX later added contracts of their own.
The striking part is how right they were at the one moment their accuracy could be tested. On the night before SpaceX listed, perpetuals on Hyperliquid and Binance were quoting the equivalent of roughly $170 a share, well above the $135 the underwriters had set.
The next day SPCX opened, ran to an intraday high above $176, and closed its first session at $161, up 19%. The stock printed almost exactly where the perps had it, and a market dominated by leverage-seeking retail traders had read first-day demand more accurately than the banks that spent months building the offering price.
That gap was also where the money was. The perpetual market was pricing SpaceX well above the $135 IPO price, so traders could buy the contract before listing and bet the two would meet. Every one of these contracts was built to automatically switch over to SpaceX’s real share price the moment the stock began trading, so any gap between the perp and the eventual opening price would close on its own. With the IPO already four times oversubscribed, the direction was rarely in doubt, and the pre-listing window was the only place to make the trade.
Then reality caught up with the market that had predicted it. SPCX has fallen more than 40% from its June peak, dropping from the $135 IPO price to about $115 as of publication.
The reason is one the perp could never have priced — supply. Only a sliver of SpaceX’s shares were sold at the IPO, and starting around August 6, roughly 900 million locked-up insider shares become eligible to sell.
What SpaceX showed in the extreme is what the research says is already true in ordinary crypto trading — the derivatives market is increasingly where price gets discovered. Spot follows.
Perps are excellent at pricing demand and blind to supply, which is worth remembering every time a bitcoin rally or a flush starts in the funding rate before it reaches spot.
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