What is a perpetual future?

You are holding a price-tracking contract, not coins. A perpetual future is a ledger line that gains or loses value when the underlying moves. It has no expiry date. You never take delivery unless you close into spot elsewhere.

◇ THE MECHANIC

Unlike a quarterly future, a perp does not settle on a calendar date. It stays open until you close or the venue liquidates you. Funding, the recurring cash transfer between longs and shorts, keeps the contract near spot. On many crypto venues it runs hourly; on some regulated venues every eight hours. When perps trade above the index, longs pay shorts. When below, shorts pay longs.

You post initial margin, the collateral to open, and choose leverage. P&L tracks notional, the full size of your position, not margin alone. At 5× on $2,000 margin you control $10,000 of exposure. A 1% move is ±$100 on the position.

Primary source: Hyperliquid perpetual assets docs describe how perps stay open with no delivery date.

◇ THE PURPOSE

Perps give continuous exposure without rolling dated futures. Arbitrageurs keep the contract near spot via funding, not delivery. That is convenient for you. It also adds a recurring holding cost on your P&L.

◇ THE RISK

The UI shows a BTC size, but you do not own Bitcoin. You own a contract tied to BTC. You cannot send it to a cold wallet, stake it, or withdraw it. If the venue halts withdrawals, your perp still marks to market while collateral sits wherever the venue holds it.

◇ WORKED EXAMPLE

Same $10,000 BTC exposure, three ways

All three give ~$10k price sensitivity. Only spot is ownership.

	Spot	Quarterly future	Perp
What you hold	BTC in custody	Contract expiring in ~90 days	Contract with no expiry
What you owe while holding	Custody risk, no carry to market	Roll or close before expiry	Funding every hour (venue-dependent)
How you exit	Sell spot	Close or roll to next quarter	Close the perp
Ends when	You sell	Expiry date	You close, get liquidated, or venue halts

All three give you roughly $10,000 of BTC price sensitivity, meaning how much your P&L moves when BTC moves, at the entry moment. Only spot gives you the asset. The perp gives you the same sensitivity with the smallest upfront capital and the longest funding clock.

Pick the container that matches what you want. Spot is ownership. A perp is a rented line on price.

◇ RECAP

• What are you holding? Synthetic price exposure, not the underlying asset.
• What do you pay while holding? Funding (Lesson 03: the recurring transfer between longs and shorts).
• What forces you out? Liquidation when equity falls below maintenance margin (Lesson 04: the automatic close when your collateral runs out).
• When is a perp wrong? When holding costs and leverage matter more than your horizon (Lesson 06: long views with hostile funding).