Why would someone trade inverse perps?

Some reasons:

• Hedging low‑price risk: Your payoff increases when the underlying spot price falls (because 1/P rises).

• Expressing a “collapse” view: If you expect a sharp drop in an asset, longing the inverse asset is a way to bet on that scenario.

• Portfolio construction: Inverse exposures can be used to build more complex strategies (e.g., convex hedges, tail‑risk protection, pair trading).

• Hedging with reduced liquidation risk: on standard perps, a +100% move in the underlying will liquidate all short positions, even at 1x leverage. On inverse perps, however, a 1x long position (which profits when the asset falls) would only be liquidated if the underlying asset’s price increased toward infinity, making liquidation from upside moves effectively impossible under normal market conditions.