CFTC Approval Sparks Growth in Regulated Perpetual Futures Markets
Perpetual futures, also known as perps, are derivative contracts that track an asset's price without expiring. Unlike traditional futures, which have a fixed settlement date, perps use a funding rate mechanism to keep prices aligned with the spot market.
The CFTC approved Kalshi's BTCPERP contract on May 29, 2026, marking the first regulated perpetual futures product available to US retail traders. This decision was significant, as it opened up the product class to retail investors for the first time in the United States.
Centralized exchanges processed $86.2 trillion in perpetual futures volume during 2025, representing a 47% increase compared to the prior year. Decentralized perp platforms reached $6.7 trillion in total volume during 2025, a 346% surge from the previous year's totals.
The funding rate is a periodic payment between long and short traders that keeps the perp price aligned with the underlying spot price. When the perp trades above spot, long holders pay short holders, creating selling pressure that pushes prices down. When funding turns negative, short position holders pay long position holders, creating buying pressure that pushes prices back up.