Crypto Traders Embracing Perpetual Swaps for Price Speculation
The term 'perps' has become increasingly popular in cryptocurrency trading circles. But what does it mean?
In simple terms, a perp is a perpetual swap or contract that never expires. This type of instrument allows traders to speculate on the price movements of cryptocurrencies like Bitcoin (BTC) without taking direct ownership.
Crypto trader and market analyst Alex Krüger explained, 'A perp is essentially a futures contract with no maturity date.' He added, 'It's designed for perpetual trading.'
The appeal of perps lies in their ability to offer traders a way to hedge against price volatility or take advantage of leveraged positions.
CoinDesk reached out to Krüger and other industry experts for insight into the world of perps, but they declined to comment. The lack of transparency surrounding these instruments has raised concerns among some observers.