Perpetual futures, a staple in the crypto trading world, have officially entered the US market, with exchanges like Kalshi and Coinbase receiving regulatory approval. The product has garnered significant attention, with trading volume exceeding $1 billion within a week of launch.
However, Wall Street's major financial institutions are taking a more measured approach, citing the need for clearer regulations, liquidity, and infrastructure before committing to the market. Unlike proprietary trading firms and market makers, which are more agile and willing to take on operational risks, large banks face stricter capital rules and reputational risks, making them more cautious in their adoption of perpetual futures. The potential use cases for perpetual futures extend beyond speculation, with the possibility of managing weekend risk and providing a source of price discovery.
Nevertheless, the market's depth and regulatory framework remain key concerns, with industry insiders anticipating a competitive and potentially contentious landscape as exchanges push to expand perpetual futures into traditional markets.