Perpetual futures are putting more pressure on traditional U.S. exchanges
Perpetual futures, or “perps,” are having an increasing impact on the derivatives market and are forcing traditional U.S. exchanges to rethink their strategies, according to CNBC. These contracts trade around the clock, have no expiration date, and can be linked to various asset classes, including cryptocurrencies, stocks, and commodities.
Investors fear that the proliferation of perps could impact the revenues of traditional exchanges. Traditional futures contracts must be “rolled over” before they expire: investors sell a contract with a near-term expiration date and buy one with a longer maturity. Perpetual futures do not require such transactions, which, according to CNBC, could deprive exchanges of a portion of their revenue from derivatives.
According to CNBC, the average daily notional trading volume of perpetual futures on the decentralized Hyperliquid platform in June was $9.6 billion. The average daily notional trading volume of perps on centralized and decentralized platforms this year was estimated at approximately $150 billion. At the same time, it is difficult to compare these figures with traditional futures or options, as perps do not have a standardized contract size.
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In May, the U.S. Commodity Futures Trading Commission (CFTC) approved perpetual Bitcoin futures for Kalshi, which became the first regulated U.S. operator to offer such products. In the first month after its launch, Kalshi traded over $20 billion in perpetual futures and filed applications for contracts related to gold, silver, and platinum.
The question of whether to classify perps as futures or swaps has become the subject of a legal dispute. CME CEO and Chairman Terry Duffy filed a lawsuit against the CFTC in June over its approval of Bitcoin perps for Kalshi, arguing that such instruments should be classified as swaps. Capital, margin, and risk management requirements depend on this classification. The CFTC called the lawsuit baseless, and a Kalshi representative stated that the CME’s lawsuit stems from a fear of competition.
Traditional operators are already developing similar products or partnering with crypto platforms. Robinhood offers cryptocurrency perpetual futures to clients in Europe, while Cboe has launched “perpetual futures” with a 120-month maturity. Representatives from Cboe and Nasdaq, meanwhile, emphasize the differences between perps and exchange-traded options, particularly regarding risk management and the role of liquidity on listing platforms.
