Key Takeaways:
Regulated perpetual futures have landed in the US, but Wall Street's largest banks are holding back until liquidity and legal questions are resolved.
On May 29, the Commodity Futures Trading Commission cleared Kalshi to list the first regulated bitcoin perpetual futures contract in the US, bringing a product that Bank of America estimates generates about $90 trillion in annual global volume into the American regulatory framework.
"We've charted a path for one of the most liquid segments of the crypto asset markets to exist within the US regulatory framework," CFTC Chairman Michael S. Selig said in a statement, describing an approach that can "limit excessive leverage, volatility and systemic risk, rather than pushing those risks offshore to unregulated venues."
Kalshi's perpetual futures topped $1 billion in trading volume within a week of their June launch, making them the company's biggest product debut since prediction markets. Coinbase also received approval to list regulated perpetuals. The exchange has since filed with the CFTC to expand into precious metals — gold, silver and platinum — under a 45-day review process, and is evaluating contracts tied to foreign exchange and equities.
Inside Wall Street, however, interest does not mean immediate adoption. People familiar with the discussions said most large financial institutions are still studying the products rather than preparing major launches, with proprietary trading firms and market makers expected to move first. The profit available in a young market may not yet justify the cost of building compliance, clearing and risk systems around it.
CME challenge and the swaps question
A legal fight is taking shape over how perpetual contracts should be classified. CME Group sued the CFTC in June, arguing that Kalshi's bitcoin perpetuals should be treated as swaps rather than futures, which would subject them to stricter margin rules and registration duties. The dispute reflects a broader commercial tension as incumbent exchanges protect existing businesses, with one industry insider noting that "a lot of this stuff is more commercial than people are going to admit to out loud."
The classification question may become more important as exchanges push perpetuals into commodities, equities and other traditional markets. CME is also launching continuous gold futures trading this week, placing it in direct competition with Kalshi's proposed precious metals products.
Weekend hedging and the liquidity gap
Beyond speculation, perpetuals could solve a structural problem in traditional markets: weekend risk. Traditional futures markets close for part of the weekend, while wars, elections and policy decisions do not. A liquid 24-hour perpetual market would allow traders to adjust positions as events unfold and use weekend prices to estimate where CME futures may reopen.
The challenge is depth. Weekend liquidity remains thin, and collateral systems do not always move as quickly as the markets they support. "The demand has to be there, or the capital won't be," one industry insider said, arguing that firms will not commit balance sheet until customer activity justifies it.
For now, the regulated perpetual market sits at an inflection point. Trading firms see a product they understand, regulators see a market moving onshore and exchanges see a chance to capture new volume. But the largest banks are unlikely to lead. They will wait for the rules, liquidity and infrastructure to catch up.
This article is for informational purposes only and does not constitute investment advice.
