Arthur Hayes: Crypto Perpetuals to Disrupt Equity Price Discovery
Introduction: The Looming Paradigm Shift in Global Finance
In a bold forecast that signals a potential tectonic shift in global markets, BitMEX co-founder Arthur Hayes has predicted that equity price discovery will migrate from traditional exchanges to 24/7 crypto perpetual futures markets. This prediction, detailed in his recent public statements, positions crypto-native financial instruments as a direct challenger to the established pillars of traditional finance. Hayes argues that the inherent advantages of perpetual swaps—continuous trading, deep liquidity, and high leverage—are poised to pressure traditional exchanges into an "adapt or die" scenario. The catalyst for this transition, according to Hayes, is a rapidly evolving regulatory landscape that is becoming more favorable toward cryptocurrency, enabling permissionless platforms to experiment with equity-based derivatives. This convergence of technological innovation and regulatory shift suggests that the very mechanisms for determining the value of the world's largest companies could soon be dominated by the crypto markets.
The BitMEX Legacy: How Perpetual Swaps Revolutionized Crypto Trading
To understand Hayes' prediction, one must first appreciate the instrument at its core: the perpetual swap. Hayes, whose creation of BitMEX helped popularize this product, described how it transformed crypto trading. The perpetual swap is a futures-like derivative with a critical innovation: it has no expiration date. This eliminated the fragmentation of liquidity that occurred with quarterly futures contracts, where trading volume and interest would migrate from one contract to the next upon expiry.
By consolidating liquidity into a single, continuously traded instrument, perpetual swaps became the dominant venue for price discovery in the crypto asset class. Hayes stated that these products track spot prices through a funding rate mechanism while enabling high leverage. Furthermore, he highlighted the accompanying systems—socialized loss mechanisms and insurance funds—as key components. These structures provide retail traders with access to significant leverage and deep liquidity while, according to Hayes, limiting legal risk to initial margin deposits in the event of trade failures. This model, born in the crypto world, created a more efficient and accessible derivatives market than what was previously available.
Hyperliquid's HIP-3: A Blueprint for Permissionless Equity Perpetuals
Hayes did not base his prediction on theory alone; he pointed to a concrete, early-stage example as proof of concept: Hyperliquid’s HIP-3. He highlighted that this permissionless protocol enabled a firm called XYZ to launch a Nasdaq 100 equity perpetual that currently trades significant daily volume.
This development is critical for several reasons. First, it demonstrates that the infrastructure for creating and trading synthetic equity exposures already exists on decentralized platforms. Second, the fact that this product has garnered "real volume" indicates market demand for 24/7 access to traditional market indices outside the confines of conventional trading hours. The success of HIP-3 serves as a live pilot program, validating Hayes' argument that the technology and market appetite are present for equity perpetuals to gain traction on crypto platforms. He predicted that equity perpetuals will become a major product in 2026, with both centralized exchanges and decentralized platforms competing to list them by year-end.
The Regulatory Pivot: Trump Administration's Crypto-Friendly Stance as a Catalyst
A pivotal element in Hayes' forecast is the changing regulatory environment in the United States. He referenced his own legal proceedings with the CFTC and the wave of enforcement actions following the FTX collapse as examples of a previously hostile climate. However, he stated that this climate shifted in 2025 under the Trump administration, which has adopted a more favorable stance toward cryptocurrency.
According to Hayes, this shift is not merely rhetorical; it has enabled "sandbox-style experiments for new derivatives." This regulatory openness lowers the barrier for innovation and reduces the legal uncertainty that has long plagued crypto businesses. Furthermore, Hayes stated that this change has encouraged global regulators to follow U.S. policy, giving exchanges such as SGX (Singapore Exchange) the confidence to pursue their own perpetual listings. This international ripple effect is crucial for creating a globally integrated market for these new instruments.
Traditional Finance's Response: An "Adapt or Die" Moment
The emergence of this new competitive threat has not gone unnoticed by incumbent institutions. Hayes reported that U.S. and Asian exchanges, including CBOE (Chicago Board Options Exchange) and SGX, are preparing to introduce their own perpetual products by the end of 2025. This move represents a direct response to the innovation originating from the crypto sector.
Hayes characterized this as an "adapt or die" moment for traditional finance. He argued that established exchanges risk losing liquidity and relevance to crypto venues and decentralized exchanges if they fail to adopt two core features of the crypto model: the perpetual swap structure itself and the socialized loss margin systems. The existing infrastructure of traditional clearinghouses faces several constraints that put them at a disadvantage. Hayes cited under-capitalized guarantee funds, restrictive rules on retail leverage, and legacy operating hours that are incompatible with today's 24/7 information flows as significant structural hurdles.
The Late 2020s Forecast: S&P 500 and Nasdaq 100 Perpetuals Lead the Charge
Looking further ahead, Hayes projected a specific timeline and identified the assets most likely to lead this transition. He stated that by the late 2020s, the largest derivatives on major U.S. benchmarks including the S&P 500 and Nasdaq 100 will be perpetuals traded on crypto exchanges rather than futures listed on CME (Chicago Mercantile Exchange) and other incumbent platforms.
This projection underscores his core thesis: price discovery will follow liquidity. If crypto perpetuals can offer deeper liquidity, higher leverage, and more accessible trading hours, they will naturally become the primary venue for establishing asset prices. Hayes elaborated that perpetual swaps allow traders to post less collateral while accessing meaningful exposure. This efficiency is particularly attractive in a post-FTX environment, reducing the need for traders to deposit large sums with exchanges following multiple industry hacks and failures.
Conclusion: A New Era of Market Structure is on the Horizon
Arthur Hayes' prediction is more than just another bullish crypto take; it is a structured argument about the future evolution of market microstructure. The migration of equity price discovery to crypto perpetuals represents a fundamental challenge to the operating models, trading hours, and risk management systems that have defined traditional finance for decades.
The convergence of proven technology (BitMEX-style perpetuals), live experimentation (Hyperliquid's HIP-3), a shifting regulatory landscape, and competitive pressure from traditional exchanges themselves creates a powerful narrative for change. For professional and retail traders alike, this signals a future where access to global equity markets is seamless, continuous, and more capital-efficient.
What should market participants watch next? The key metrics will be the daily volumes of nascent equity perpetuals on platforms like Hyperliquid and their growth trajectory through 2026. Observers should also monitor announcements from CBOE and SGX regarding their planned perpetual products, as their success or failure will be a major test of traditional finance's ability to adapt. Finally, any further developments in U.S. cryptocurrency regulation will either accelerate or hinder this entire process. The race to define the next generation of derivatives trading is officially underway, and its outcome will reshape the landscape of global finance.
Disclaimer: This article is based solely on publicly available statements made by Arthur Hayes. It does not constitute financial advice. Readers should conduct their own research before engaging in any trading activity.