‘Perpetual contracts‘ to invest in Bitcoin are becoming ever more popular. Smart or risky?
Last Updated on 29 September 2025 by CryptoTips.eu
Since the beginning of the year, European crypto investors have been introduced to “perpetual contracts” trading, a system for investing in the crypto market with leverage ranging from 10x to as much as 100x. Previously, these investment options were exclusive to experienced Wall Street investors, but thanks to the widespread use of apps that allow trading directly from your smartphone, they have also been made available to regular investors in recent years, without hefty fees even.
Robinhood Markets introduced it in Europe this year, and many crypto trading platforms have since adopted it. Is it wise to invest in this, or is it risky?
Margin Call
There are several films that effectively explain the demise of Lehman Brothers, the American investment bank failure which led to the 2007-2008 financial crisis. The Big Short and Too Big Too Fail are highly recommendable, but if you really want to understand the origins of the problem, I’d recommend watching Margin Call.
At one point in the movie, a young analyst explains to the managing partner (played by Jeremy Irons) of an investment bank that because of leveraged trading, the risk to their firm in the event of a market crash is much greater than it used to be.
Memecoin
With perpetual contracts, it’s essentially the same. Suppose you invest €500 in Bitcoin with a leverage of 10. You’ll win €500 if Bitcoin rises 10%, thus doubling your money. However, you’ll lose your entire investment if a flash crash occurs (which has become less common with Bitcoin in recent years, but still does happen).
However, suppose you invest in a memecoin in the same way just before it reaches its (temporary) peak or just before a Whale investor takes profit (and therefore causes the price of that memecoin to drop by some 10% in both cases in a very short time period), then you’ll lose your investment before your trade even begins.
Profits can be enormous in a short time, but be careful with before you start and watch some explainer videos.
