The long-awaited introduction of regulated perpetual futures to the US market has sparked significant interest, with trading volumes reaching $1 billion within a week of launch. These contracts, also known as 'perps', have become a staple in global crypto trading, with estimated annual volumes of around $90 trillion. However, despite their popularity, large financial institutions are adopting a wait-and-see approach, citing concerns over regulatory clarity, liquidity, and infrastructure.
In contrast, proprietary trading firms and market makers are more likely to be early adopters, given their greater flexibility to test new markets and manage operational risk. The potential use cases for perpetual futures extend beyond speculation, with potential applications in managing weekend risk and providing a source of price discovery. Nevertheless, the market's development is likely to be shaped by regulatory debates, competitive dynamics, and the need for deeper liquidity.