The popularity of perpetual futures in the crypto space has led to their introduction in regulated American markets, with trading volumes reaching $1 billion within a week of launch. These contracts, also known as 'perps', have no expiration dates and require periodic funding payments to maintain their price close to the underlying asset. With an estimated annual volume of $90 trillion, according to Bank of America, perps have become a staple in global crypto trading. The Commodity Futures Trading Commission (CFTC) has cleared Kalshi and Coinbase to offer regulated perpetual futures in the US.
However, large financial institutions are adopting a wait-and-see approach, citing stricter capital rules, client obligations, and reputational risk. In contrast, proprietary trading firms, market makers, and newer clearing firms are more likely to be the first movers.
The potential use cases for perps extend beyond speculation, as they could help traders manage weekend risk and provide a source of price discovery. Nevertheless, the demand for perps must be substantial to justify the commitment of capital, and the regulatory environment, including the treatment of perpetual contracts as futures or swaps, remains a topic of debate.