BitMEX Alpha: Equity Perp Funding Arbitrage on Hyperliquid

While the broader DeFi market fights over 5% yields, a structural arbitrage trade is emerging thanks to equity perps. Retail demand for leverage on high-beta tickers like $NVDA is creating a funding rate premium that institutional capital cannot easily arbitrage away just yet. BitMEX’s invention of the Perpetual Swap created a new way to make money in crypto. Now, that same mechanic is eating the traditional equity market.

We believe there is currently a market inefficiency in the equity perp market stemming from increasing retail speculation, off-hours oracle mechanics, and the friction between TradFi and DeFi. 

In today’s article we provide a guide on how traders can leverage these factors to generate delta-neutral yields. Let’s dive in. 

From XBTUSD to Equity Perps: What are Equity Perpetuals?

In 2016, BitMEX introduced the XBTUSD Perpetual Swap, creating the first instrument that allowed traders to speculate on price with leverage and without an expiry date, which quickly became the most traded crypto product in history.

Today, we’re witnessing the next evolution of our invention: the Equity Perpetual, currently popularised on niche on-chain venues like Hyperliquid. We believe that 24/7 equity perpetual swap trading is the inevitable end-state of finance.

Equity Perpetuals on Hyperliquid are synthetic, cash-settled contracts.

• Quanto Exposure: You do not own the share. You do not get voting rights. You are trading a price feed settled in USD stablecoin (USDC).

• No Dividends: Unlike holding spot NVDA for example, you don’t receive dividends. The price impact of dividends is internalised into the funding curve.

• 24/7 Trading: This is the key for the arbitrageur. While the Nasdaq closes at 4 PM EST, these perps trade 24/7.

  • Why this matters for Arb: Funding is paid hourly. If you hold the short position through the weekend, you collect funding payments for 48 hours while the underlying spot market is frozen.

The Opportunity: Equity Funding Arbitrage

Asset Class: HIP-3 Equity Perpetuals (Trade.xyz on Hyperliquid) 

Target Ticker: NVDA (Nvidia) 

Current Yield: ~30% 

The trade is a Delta-Neutral Basis Harvest. You are exploiting the pricing inefficiency between the „24/7 Degenerate traders“ on-chain and the „9-5 Traditional traders“ off-chain.

The Trade Structure

• Long Leg (Off-Chain): Buy Spot NVDA in a tax-efficient brokerage.

• Short Leg (On-Chain): Short NVDA-USDC Perpetual on Hyperliquid 

• The Edge: Because you have the same notional amount in both directions, your net delta is 0. You do not care if NVDA goes to $500 or $50. You are purely harvesting the Funding Rate, which is paid hourly by retail traders desperate for leverage.

Conclusion

We invented the crypto Perpetual Swap at BitMEX, it was inevitable that this superior market instrument would eventually consume traditional assets.

The current dislocation in Equity Perpetuals offers a rare window where market structure, retail psychology, and regulatory friction overlap to create outsized returns. For those capable of managing the liquidation risks of high-beta assets, shorting the „degenerate bid“ on equity perps is currently one of the most attractive risk-adjusted trades in the ecosystem.

​BitMEX Blog 

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