Arthur Hayes predicts: Perptual Futures will disrupt traditional exchanges, the era of 24/7 equity trading is coming.

Arthur Hayes recently released a significant prediction, stating that the price discovery mechanism for equities will gradually migrate to the 24/7 operational market of cryptocurrency Perptual Futures. He believes that under the friendly regulatory policies of the Trump administration, traditional exchanges face a survival crisis of “evolve or die,” and it is expected that by the end of the 2020s, the trading volume of Perptual Futures for major indices such as the S&P 500 and Nasdaq 100 will surpass that of traditional futures. This prophecy is gradually becoming a reality as decentralized platforms like Hyperliquid successfully launch Nasdaq 100 Perptual Futures.

Analysis of the Disruptive Advantages of Perpetual Futures

Arthur Hayes, as the pioneer of Perptual Futures products, has deeply elaborated on the core competitiveness of this type of derivative from the perspective of product design. The BitMEX he founded launched the perpetual swap contract in 2016, successfully concentrating market liquidity into a single product by eliminating the expiry date mechanism, accurately tracking spot prices while providing high leverage trading capabilities. This design cleverly addresses the liquidity fragmentation issue caused by the expiry dates of traditional futures contracts, bringing unprecedented trading efficiency to the encryption market.

Compared to traditional financial derivatives, the core advantages of Perptual Futures are reflected in three dimensions: capital utilization efficiency, legal risk control, and market entry barriers. The introduction of a socialized loss system and insurance fund allows retail traders to gain high leverage exposure while only bearing the initial margin risk, without worrying about counterparty default risk. This risk isolation mechanism has become particularly important after the FTX incident, as users no longer need to deposit large amounts of funds into the exchange's custody, fundamentally reducing institutional credit risk.

Hayes specifically pointed out Hyperliquid's HIP-3 protocol as a key milestone in industry development. The institution named XYZ successfully launched Nasdaq 100 equity Perptual Futures through this permissionless protocol, and has currently accumulated a substantial daily volume. This case demonstrates that even in a Decentralization environment, complex financial derivatives can gain market recognition and form real liquidity, paving the way for traditional stock index products to be brought on-chain.

From a technical architecture perspective, the automated funding rate mechanism of Perptual Futures perfectly adapts to the 24/7 uninterrupted trading characteristics of the encryption cryptocurrency market. Traditional futures exchanges are limited by trading hours and settlement cycles, making it impossible to respond timely to information flow during non-trading hours. However, Perptual Futures ensure a close tracking of the contract price to the underlying asset through continuous rate adjustments, which offers a significant advantage in future global equity trading.

Regulatory Shift and Market Opportunity Capture

The significant shift in the U.S. regulatory environment provides a policy foundation for Hayes's predictions. Following a series of enforcement actions after the FTX collapse and his legal disputes with the CFTC, Hayes observed a more friendly regulatory stance towards encryption after the Trump administration takes office in 2025. This shift is reflected not only in the easing of enforcement attitudes but, more importantly, in the policy space gained for some sandbox-style regulatory experiments, creating a rare window for innovation in new derivatives.

The policy following effect of global regulators on the United States has further amplified this trend. Hayes mentioned that traditional Asian institutions such as the Singapore Exchange (SGX) have gained enough confidence to begin advancing their perpetual product listing plans, with several mainstream exchanges, including CBOE, expected to launch their own Perpetual Futures products by the end of 2025. This top-down regulatory recognition, combined with bottom-up product innovation, accelerates the integration process between traditional finance and encryption finance.

From a timeline perspective, Hayes predicts that 2026 will become the “Year of Equity Perpetual Futures,” when centralized exchanges and decentralized platforms will compete to launch such products. This timing takes into account both product maturity and regulatory adaptation cycles. Currently, multiple trading platforms are conducting technical tests and preparing liquidity, and it is expected that we will see the first batch of equity perpetual futures with substantial impact emerge next year.

Key Development Stages and Expectations

By the end of 2025: Traditional exchanges such as CBOE and SGX will launch Perptual Futures products.

2026: Equity Perptual Futures become mainstream products, CEX and DEX compete comprehensively.

End of the 2020s: The trading volume of S&P 500 and Nasdaq 100 Perptual Futures surpasses traditional futures.

Regulatory Background: Trump administration friendly policies, global regulatory follow-up

Technical Foundation: Hyperliquid HIP-3 and other permissionless protocols

Responses and Challenges of Traditional Exchanges

In the face of the rise of Perptual Futures, traditional exchanges are facing unprecedented systemic challenges. Hayes sharply points out that traditional clearinghouses are gradually losing their competitive advantage due to insufficient capital-backed guarantee funds, restrictive regulations on retail leverage, and traditional operating hours that are incompatible with 24/7 information flow. These structural issues have become particularly prominent in the digital age, making it difficult for traditional trading venues to compete with encryption-native platforms in terms of efficiency and flexibility.

Liquidity migration is the most direct threat to traditional exchanges. Hayes predicts that as the perpetual futures of major benchmark indices gain deep liquidity on cryptocurrency exchanges, the price discovery function will naturally shift to these emerging platforms. Once this migration begins, it will create a self-reinforcing cycle: better price discovery attracts more traders, which in turn provides better liquidity, further improving price discovery. If traditional exchanges cannot embrace this trend in a timely manner, they are likely to fall into a vicious cycle of liquidity depletion.

The transformation of the operating model has become a life-and-death test for traditional institutions. Perptual Futures are not only a new product, but represent an entirely new business logic—socialized loss distribution, insurance fund mechanisms, and 24/7 operational support. All of these require traditional exchanges to fundamentally restructure their technical architecture and risk management. Some forward-looking institutions have begun to form dedicated encryption derivatives teams, but organizational inertia and cultural differences have caused the pace of transformation to lag far behind the speed of market evolution.

From the perspective of the competitive landscape, the relationship between traditional exchanges and encryption platforms is shifting from complete opposition to competitive coexistence. Some traditional institutions choose to enter the market through investment or cooperation rather than direct confrontation. However, Hayes believes that this “half-hearted” approach to participation is insufficient to cope with fundamental disruption; only by fully embracing the philosophy of encryption finance and reconstructing business models can one maintain competitiveness in the new era.

Market Impact and Investment Strategy Outlook

The penetration of Perptual Futures into the equity market will profoundly change asset pricing and trading behavior. The 24/7 continuous trading mechanism allows global market participants to respond immediately to news events and changes in fundamentals, eliminating the information accumulation effect during traditional market opening and closing gaps. This continuous pricing capability is particularly important during times of crisis, as it avoids overnight gap risks and provides more precise tools for risk management.

From the perspective of investor structure analysis, the popularity of Perptual Futures will further blur the boundaries between traditional finance and encryption finance. Institutional investors may gradually migrate some trading activities to the encryption platform to take advantage of its superior leverage conditions and capital efficiency. At the same time, global retail investors will gain market access conditions similar to traditional institutions, and this democratization effect may change the power balance among market participants.

Hayes's own trading behavior also provides interesting signals for the market. On-chain data shows that although he previously stated he would not sell his held Ethereum, he has liquidated a significant amount of altcoin positions following a recent sharp market decline. On one hand, this indicates that even long-term optimists adjust their positions based on market conditions, while on the other hand, it suggests he may be preparing ammunition for the next phase of positioning. He recently praised a privacy coin that achieved a triple-digit monthly increase on social media, indicating that he is still actively looking for Alpha opportunities.

The strategic implications for ordinary investors indicate that the expansion of the Perptual Futures market brings both opportunities and increased risks. A high leverage environment can amplify market volatility, while the socialized loss mechanism may lead to unexpected losses in extreme market conditions. Investors need to gain a deep understanding of the product mechanisms, manage their risk exposure cautiously, and pay attention to the arbitrage opportunities arising from the price differences between traditional stock indices and crypto platforms. As more traditional assets are brought on-chain in the form of Perptual Futures, cross-market strategies will become increasingly important.

Arthur Hayes' prophecy depicts a future where traditional finance and crypto finance are accelerating their integration. Perpetual Futures, as a financial innovation native to crypto, is being reversed output into the traditional asset domain, reshaping the operation of global capital markets. This process is driven not only by technology but also benefits from a shift in regulatory attitudes and an increase in institutional participation. As the key milestone of 2026 approaches, traders, exchanges, and regulatory bodies need to prepare for this paradigm shift. In the future market of 24/7 uninterrupted trading, those who can adapt to the new rules first will gain a valuable head start, while the hesitant may face marginalization.