Perpetual Futures Arrive in US Market Amid Regulatory Battle

Perpetual futures, a financial product responsible for most of the world's crypto leverage, has arrived in the US market. Coinbase began offering US perpetual-style futures on its CFTC-regulated derivatives exchange, starting with nano Bitcoin and Ethereum contracts that track spot prices and carry embedded leverage.

This marks a significant development in the US market, as it brings with it the entire machinery responsible for offshore price discovery. Perpetual futures make up the large majority of crypto derivatives activity, accounting for upwards of 90% of derivatives volume in some measures, with derivatives themselves accounting for roughly 80% of all crypto trading.

The CFTC approved KalshiEX's BTCPERP as a futures contract referencing Bitcoin's spot price and issued a policy statement inviting other exchanges to bring similar contracts through the same door. The framework that made this possible is now being fought over in federal court, with CME suing the CFTC and Chairman Michael Selig.

CME argues that perpetuals meet the statutory definition of swaps under the Commodity Exchange Act, which would pull them into a far heavier regime of dealer registration, capital rules, and reporting. The CFTC is defending its turf on other fronts too, suing Kentucky in late June over which authority governs contract markets.