BitMEX’s early-January 2026 take on 2025 is straightforward: perpetual swaps have entered a “post-yield” phase where funding-rate carry is no longer the default edge. In that framing, market structure—not just direction—became the deciding factor for who made money and who got liquidated.
Two datapoints anchor the argument. Funding returns compressed sharply—often below 4%—and an Oct. 10–11, 2025 liquidation cascade was pegged at roughly $20 billion, which BitMEX treats as the dislocation that reset expectations across venues and strategies.
Funding carry stopped being “easy money”
BitMEX ties the funding compression to a crowded positioning regime. Institutional participation and exchange-native delta-neutral products helped build persistent structural short inventory, which mechanically pushed funding rates down and, at times, below U.S. Treasury yields—shrinking the classic arbitrage spread.
As that spread narrowed, the long-spot/short-perp playbook lost its “defensive” profile. When too many desks run the same delta-neutral trade, liquidity becomes the real risk factor, and crowded hedges can become a liability the moment spreads widen and execution worsens.
The October shock is used as the proof point. BitMEX argues that aggressive auto-deleveraging (ADL) on some exchanges effectively forced deleveraging of market-maker short hedges, leaving professional liquidity providers with unwanted spot exposure during a fast drawdown—followed by withdrawals of liquidity and the thinnest books described since 2022.
Venue governance became a first-order risk
Another theme is trust and execution quality. A growing gap opened between transparent matching engines and venues operating “back-book” models, with examples where profitable traders faced trade reversals or account restrictions under “abnormal trading behaviour” clauses—turning counterparty policy into direct P&L risk.
Decentralized perps didn’t escape the regime change either. BitMEX’s view is that on-chain transparency can enable predatory behavior via “liquidation maps,” where visible positions and thresholds become a target, and it points to the Plasma XPL incident as a pre-TGE oracle manipulation that triggered forced liquidations—supporting the claim that battle-tested risk engines and accountability still matter in certain stress scenarios.
Operationally, the message shifts from yield extraction to control design. The priority stack becomes risk-engine robustness and ADL governance, hardened oracle design and governance, clear dispute and trade-reversion processes, transparent margin/liquidation rules, and tighter counterparty screening when onboarding liquidity partners—because those elements define survivability when markets gap.
BitMEX also flags how product teams are adapting. Innovation is moving toward equity perpetuals (24/7, crypto-collateralized stock exposure) and strategies that trade funding-rate volatility rather than harvesting passive carry, which is a different monetization model than the prior “funding as yield” era.
The broader takeaway is consistent with Stephan Lutz’s line that “2025 marked a turning point where market structure mattered more than market direction.” For compliance and risk teams, that translates into a governance-first diligence posture—because as crypto derivatives increasingly intersect with traditional market expectations, the winners will be the venues and operators that can prove resilience, transparency, and accountable controls under stress.