Kalshi Enters Crypto Market with Perpetual Futures, Challenging Coinbase and Robinhood

Kalshi, a platform known for its prediction markets, is expanding its services to include crypto trading in the US, according to a report by The Information, marking a significant move beyond its core business as competition heats up in both the prediction and crypto sectors. The company plans to introduce perpetual futures contracts tied to cryptocurrencies such as bitcoin, as revealed by sources familiar with the matter. Perpetual futures are a type of derivative that enables traders to speculate on the price of an asset without actually owning it and without a fixed expiration date, distinct from traditional futures which settle at a predetermined time. Instead, perpetuals can be held indefinitely, provided traders maintain adequate collateral, with prices aligned to the underlying asset through funding payments between long and short positions. This move positions Kalshi in direct competition with major crypto platforms like Coinbase, which has been expanding its derivatives and prediction market offerings but does not yet offer true perpetual futures in the US. Kalshi's expansion is timely, given the shifting regulatory landscape in the US, which is becoming more conducive to products that have primarily been traded offshore. With its existing licenses from the Commodity Futures Trading Commission (CFTC) and recent approval for margin trading, Kalshi is well-positioned to enter the derivatives market. Initially, the company will focus on crypto-linked perpetuals but may extend this model to other asset classes in the future. This development reflects the increasing overlap between prediction markets and crypto trading platforms, with both competing for the same user base. Major crypto exchanges, including Coinbase, Crypto.com, and Gemini, have introduced prediction market products, while crypto trading volumes have seen a decline in recent months following a market downturn. Conversely, prediction markets have seen a surge in activity, attracting both users and investors, prompting platforms like Kalshi to diversify their offerings to remain competitive.