What Are Perpetual Futures (Perps) in Crypto?

‍Perpetual futures (also called perps) are one of the most-used trading tools in crypto trading. If you’ve only traded spot before, perpetual futures might sound complicated. But here’s the truth: they’re actually pretty simple.

In this beginner's guide to perpetual futures, we’ll explain what perps are in plain language, how perpetual trading works, how they’re different from spot and traditional futures, and why they’re useful. We’ll also show how you’ll soon be able to trade crypto perpetual futures right inside Telegram — through the Blum mini app.

Spot vs Futures vs Perpetuals: The Basics

Before we get into perps, let’s quickly go over the differences between the three most common crypto trading options:

• Spot trading: You buy a coin at the current market price, and you actually own it. For example, you spend $1,000 and receive $1,000 worth of ETH. Simple.
• Futures trading: You don’t own the coin. Instead, you enter a contract to buy or sell it later at a fixed price. These contracts have a set expiration date, and they’re mostly used for speculation.
• Perpetual futures: These are like regular futures, but there’s no expiry date. You can hold your position for minutes or months — as long as your margin allows it. This flexibility is what makes crypto perps so popular among crypto traders.

How Do Perpetual Futures Work?

Let’s say you think Bitcoin is about to go up.

You don’t want to buy BTC directly, but you want to profit from that price move. So, you open a long position using a perpetual futures contract. If the price rises, you earn. If it falls, you lose.

If you think BTC is going to drop, you can open a short instead. You profit if the price goes down.

Unlike spot trading, you don’t need to own the token. You’re only trading based on its price movement. And since perps don’t expire, you don’t have to keep rolling over into new contracts like with traditional futures.

What Is a Funding Rate?

This is the part that keeps the market balanced in perpetual futures.

When more traders are long than short, the funding rate goes positive. In that case, long traders pay a small fee to short traders. If more are short, then shorts pay longs.

These small fees help keep the price of the perp contract close to the real spot price of the token.

It’s like a tug-of-war — if one side gets too heavy, the fee system helps bring things back in balance.

Why Traders Use Perps

So what’s the advantage of trading perps?

They give you more ways to manage risk and take advantage of price moves. Here’s how:

• Hedging: Let’s say you’re holding BTC but think the price might drop. You can open a short position to protect your spot holdings — without selling them.
• Shorting: You can earn when the market goes down. No need to borrow coins or use complex setups.
• Leverage: You can trade with more than you actually hold. For example, 5x leverage turns $100 into a $500 position. This can grow profits — but losses too, so use carefully.
• Scalping & active trading: Want to catch small price moves? Perps make that possible. Add leverage, and even small shifts in price can turn into real profit.

Trade Crypto Perps on Blum Inside Telegram

With Blum Perps, you can:

• Go long or short on crypto, up to 24+ assets including BTC, ETH, BLUM, TON and more
• Up to 100x leverage in perpetual trading
• Trade 24/7
• Manage your positions inside the Telegram bot
• Do it all with a few taps, no login or browser needed

It’s a massive upgrade for anyone who trades inside Blum — especially Telegram-native users who want speed and simplicity.

Perpetual futures aren’t complicated. They’re just tools. Tools that give you more control, more flexibility, and more ways to trade crypto — whether you want to hedge your bags, short the market, or use leverage.