How to Execute Arthur Hayes’ Trade with BitMEX Equity Perps
For years, most traders have been focused on a one-dimensional strategy: Long or Short, and pray the market goes their way. Yet, amongst sophisticated traders, betting on a ticker’s „direction“ isn’t necessarily the only way to trade. An edge can be found in relative performance.
With the introduction of BitMEX Equity Perps, we’re not just offering access to traditional assets; we’re handing you the toolkit previously reserved for hedge funds and institutions only. You now have the ability to execute Long/Short strategies with high leverage and significantly lower costs than traditional finance.
To understand why this matters, we can look at a perfect, real-world case study rooted in a thesis inspired by BitMEX co-founder Arthur Hayes: The Coinbase (COIN) and Circle (CRCL) pair trade.
What is Pair Trading?
The goal of a pair trade is simple: Find two correlated assets where one is fundamentally stronger than the other. By going long on the stronger asset and shorting the weaker asset, you remove the „market risk.“
If the market crashes your short position makes money, offsetting the loss on your long.
Conversely, if the market rips your long position maximises gains while the short acts as a drag.
You profit from the relative performance between the two tickers, regardless of whether the overall market goes up or down.
Case Study: The Long Coinbase vs. Short Circle Trade
In mid-2025, following Circle’s Initial Public Offering (IPO), a unique opportunity emerged. The market was excited on the first stablecoin stock IPO Circle (the issuer of USDC) and underestimated Coinbase (the exchange which seeded USDC and their biggest distribution partner) on a relative valuation basis.
Arthur Hayes identified in his blog, Quid Pro Stablecoin: “Remember that Circle must hand over 50% of its net interest income to its daddy gimp Coinbase. How is it that Circle can then be worth almost 45% of Coinbase? Things that make you go hmmm…”
Arthur further argued that Circle’s valuation was inflated because it lacked an independent distribution network. Unlike Tether, which dominates offshore flows, Circle relies heavily on Coinbase to move its USDC.
The Mechanics: Circle pays roughly 50% of its interest income to Coinbase for distribution.
The Reality: Coinbase owns the customer; Circle merely rents the rails.
This fundamental insight sets up the perfect pair trade: Long $COIN (The Landlord), Short $CRCL (The Tenant).
The Result: $COIN/$CRCL Pair Outperformed BTC by >25%
Contrary to „up only“ dreams, the crypto market faced headwinds in H2 2025 (BTC -14%). Given this was a Long/Short pair trade, the portfolio survived crypto headwinds, generated 14% of net returns, and outperformed BTC by more than 25% since July 2025.
The Short Leg ($CRCL): Circle’s stock collapsed from its speculative post-IPO highs of >$200 down to ~$83. Shorting this bubble captured a nearly 61% gain.
The Long Leg ($COIN): Despite the pair trade logic, Coinbase stock corrected significantly along with the broader crypto market (Bitcoin dropped from >$100k highs), falling ~33%, still outperforming $CRCL.
Why BitMEX is the Best Venue for $COIN/$CRCL
While this strategy is powerful, executing it on a traditional brokerage (TradFi) is expensive and clunky. BitMEX Equity Perps solve the friction points that kill profitability.
1. The Funding Rate Edge: 0 Base Interest
On BitMEX Equity Perps, there is 0 base interest. You don’t pay the 10.95% base interest rate to hold a long position on other venues. You only pay the specific funding rate based on supply and demand. This often results in a significantly cheaper cost of carry, allowing you to hold pair trades far more comfortably.
2. Capital Efficiency & Leverage
Executing this trade on a TradFi venue can be tricky given issues with using leverage and setting up the trade. On BitMEX, you can use up to 20x leverage with USDT or Bitcoin as margin, allowing you to keep your crypto stack while speculating on equity spreads.
3. Traceable PnL & Execution
Traditional brokers often hide the true PnL of complex strategies behind confusing statements. BitMEX offers clear, real-time PnL tracking, 24/7 liquidity, and an interface designed for active traders, not passive investors.
Short $CRCL: https://www.bitmex.com/app/trade/CRCLUSDT
Long $COIN: https://www.bitmex.com/app/trade/COINUSDT
Finding the Next Trade
The COIN/CRCL opportunity was a textbook example of how fundamental analysis combined with the right instrument can beat the market.
The question isn’t whether you should have taken that trade – it’s what trade you will structure next. With Equity Perps now live on BitMEX, the tools to execute the next „Big Short“ or „Perfect Pair“ are finally in your hands.
Trade Equity Perps on BitMEX and enjoy up to -0.025% in Maker Rebates: https://www.bitmex.com/equity-perps
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