The highly popular perpetual futures contracts, also known as 'perps', have officially landed in the US, sparking a mix of excitement and caution among Wall Street institutions. With an estimated annual volume of $90 trillion, according to Bank of America, perps have become a staple in global crypto trading.
However, their arrival in the US has raised questions about their potential impact on traditional futures markets. The Commodity Futures Trading Commission (CFTC) has cleared Kalshi and Coinbase to offer regulated perpetual futures, but large financial institutions are still studying the product rather than preparing major launches.
Proprietary trading firms, market makers, and newer clearing firms are expected to be the first movers, as they have more freedom to test new venues and accept operational risk. The potential use cases for perps extend beyond speculation, as they could help traders manage weekend risk and provide a source of price discovery.
However, the lack of depth and regulatory clarity are major concerns, with the CME challenging the CFTC's treatment of Kalshi's bitcoin perpetuals. As the market continues to evolve, it remains to be seen whether perps will become a lasting part of traditional Wall Street or remain a niche product.