The highly popular crypto trading product, perpetual futures, has officially entered the US market, with trading volumes reaching $1 billion within a week of launch. Despite its popularity, traditional Wall Street banks are adopting a wait-and-see approach, citing the need for mature liquidity, rules, and infrastructure.
In contrast, agile trading firms and crypto exchanges are racing to capture the massive retail demand. Perpetual futures, which resemble standard futures contracts but do not expire, have become a core part of global crypto trading, with estimated annual volumes of $90 trillion. The Commodity Futures Trading Commission (CFTC) has cleared Kalshi and Coinbase to offer regulated perpetual futures in the US. However, large financial institutions are still studying the product, and the first movers are likely to be proprietary trading firms, market makers, and newer clearing firms.
The potential use cases for perpetual futures extend beyond speculation, as they could help traders manage weekend risk and provide a source of price discovery. Nevertheless, the market still faces challenges, including regulatory fights over margin rules and registration duties, as well as concerns over liquidity and collateral systems.