Kalshi's perps hit $1B in a week. Big banks are watching, not jumping in. The regulatory fight over whether they are futures or swaps is just beginning.
Perpetual futures have spent years as one of crypto's most popular trading products, especially for investors outside the United States. Now that the contracts are entering regulated American markets, Wall Street is trying to decide whether they are a passing retail craze or a lasting threat to traditional futures.
The early numbers have been hard to ignore.
Kalshi's perpetual futures topped $1 billion in trading volume within a week of launch in June, making them the company's biggest product debut since prediction markets. The exchange has since sought regulatory approval to offer perpetual futures tied to gold and silver, a sign that the product may not stay confined to bitcoin (BTC) and other digital assets.
Perpetual futures, often called perps, resemble standard futures contracts but do not expire. Traders do not need to close or roll a position into a new contract each month or quarter. Instead, periodic funding payments help keep the contract's price close to the underlying asset.
The product has become a core part of global crypto trading. Bank of America has estimated annual perpetual futures volume at about $90 trillion.
On May 29, the Commodity Futures Trading Commission (CFTC) cleared Kalshi to offer the contracts. Coinbase (COIN) also received approval to list regulated perpetual futures in the U.S.
Inside Wall Street, however, interest does not mean immediate adoption.
People familiar with discussions said perps are coming up more often, in part because U.S. regulators are allowing markets that once operated offshore to move onshore. Yet most large financial institutions are still studying the products rather than preparing major launches. The first movers are more likely to be proprietary trading firms, market makers and newer clearing firms.
Unlike large banks, prop shops trade their own capital. That gives them more freedom to test new venues, accept operational risk and withdraw if the economics stop working. Big banks face stricter capital rules, client obligations and reputational risk. For them, the profit available in a young market may not yet justify the cost of building compliance, clearing and risk systems around it.
That difference matters because the phrase "Wall Street" covers several groups moving at different speeds. Individual traders and smaller firms often arrive first. Market makers tend to follow once volume grows. Banks usually want years of data, clear regulatory treatment and stable infrastructure before committing large sums.
Still, the potential use cases extend beyond speculation. Perps could help traders manage weekend risk. Traditional futures markets close for part of the weekend, even though wars, elections and policy decisions do not. A trader holding options exposure on Friday may have to wait until Sunday night to hedge a sharp move.
A liquid 24-hour perpetual market could change that. Firms could adjust positions as events unfold, then use weekend prices to estimate where CME futures may reopen. Insiders said that could make perps useful as both a hedge and a source of price discovery.
"The demand has to be there, or the capital won't be," one industry insider said, arguing that firms won't commit balance sheet until customer activity justifies it.
The problem is depth. A contract may trade around the clock, but that does not mean institutions can move large positions without shifting the market. Weekend liquidity remains thin, and collateral systems do not always move as quickly as the markets they support.
There is also a regulatory fight taking shape. One key question is whether some perpetual contracts should be treated as futures or swaps. That distinction affects margin rules, registration duties and who can provide liquidity. Industry insiders said those legal questions may become more important as exchanges push perps into commodities, equities and other traditional markets.
The debate is also becoming a competitive one. CME has challenged the CFTC's treatment of Kalshi's bitcoin perpetuals, arguing the contracts should be regulated differently. Similar disputes could emerge if exchanges seek to expand perpetuals into equities and other asset classes.
"A lot of this stuff... is more commercial than people are going to admit to out loud," another industry insider said, suggesting some opposition reflects incumbent exchanges protecting existing businesses as much as concerns about market structure.
For now, Wall Street's view is cautious rather than hostile. 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.
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