The market for cryptocurrencies is known for boom-and-bust trades. It’s about to get even wilder.

Traders seeking rapid returns have made a speculative bitcoin play one of the most popular crypto bets globally. So-called perpetual futures potentially offer returns of 10 or 20 times an initial investment–or huge losses.

Known as perps, the contracts give traders access to extreme leverage and have exploded in popularity during a rally that has sent bitcoin prices up more than 70% over the past year. Though popular in other parts of the world, perps were largely unavailable until recently to U.S. traders on regulated venues.

Their emergence is a sign that financial markets, which have steadily grown riskier since 2020, will likely keep growing more speculative. Although U.S. stock indexes are at records and valuations are stretched, many traders are enthusiastic about making ever-bigger bets.

Perps made up around 68% of bitcoin trading volume in 2025, according to Adam Morgan McCarthy, head of research at analytics firm Kaiko. Here’s how they work.

The instruments are derivatives, but unlike traditional contracts lack expiration dates or so-called “strike prices,” at which contracts can be exercised. Gains or losses are based on bitcoin’s moves; the trades are akin to options that are automatically rolled further and further out in time.

For example, a trader might open a bullish position in perps with $500. She gets 10 times leverage, which means she has exposure to $5,000 worth of bitcoin. If bitcoin prices jump by 10%, her initial investment doubles. She just made $500. Of course, a 10% price drop means she is wiped out.

When perps are trading at higher levels than the spot price, those holding long positions regularly pay something called a funding rate to the counterparty on the derivative every eight hours. This is designed to keep the prices of futures contracts and underlying bitcoin prices linked. Those who are short the contracts can receive the funding rate.

The bets can be big moneymakers for those hosting the trades.

At brokerages like Robinhood, options and crypto trading is far more lucrative than plain-vanilla stock trading. Crypto and options trading drove almost 80% of the brokerage’s transaction-based revenues in the second quarter. Stocks made up just 12% of such revenues.

At a conference this month, Catherine Clay, global head of derivatives at Cboe Global Markets, said the exchange would launch perps in November.

Mainstream brokerage Coinbase introduced its retail clients to perps this summer. Scott Shapiro, its head of trading, said the platform isn’t limiting itself to leverage of 10 times the initial investment. “We want to just keep pushing that envelope forward,” he said.

As with so many other speculative endeavors, the house may turn out to be the real winner.