By Krystal Hur and Vicky Ge Huang
A newfangled kind of derivative that trades at all hours and with leverage grew into a sensation in overseas markets. And now that these perpetual futures are landing on U.S. shores, shares of the incumbent exchanges are taking a hit.
Late last month, the Commodity Futures Trading Commission approved the listing of perpetual-futures contracts tied to cryptocurrencies at prediction-markets platform Kalshi, and allowed Coinbase Global's U.S. customers to access its global perpetuals. The agency also unveiled a regulatory framework that offered registered U.S. platforms a path to launching their own "perps."
Perps, which never expire and let traders pile on leverage that amplifies their potential gains and losses, have already made their mark in the U.S. Within weeks of being listed, Kalshi's basket of perps tied to cryptocurrencies has surpassed $8.5 billion in trading volume.
Their rising popularity is already weighing on the shares of some of the large exchange operators that have built their businesses around listings for traditional derivatives, from interest-rate swaps to futures tied to crude oil and stock indexes.
CME Group's Class A shares have fallen 12% since the CFTC's approval of perps. Cboe Global Markets has lost 26%, Intercontinental Exchange has declined 11% and Nasdaq has slipped 9%.
"The agency will continue to ensure a level playing field is available to all firms operating in our markets," a CFTC spokeswoman said.
Some exchange operators say that perpetual futures serve a different purpose than traditional futures and options. Perps, they say, are riskier than garden-variety futures because of their so-called funding rates, or the payments that traders are on the hook to pay to keep the contract's price aligned with the underlying asset's price.
And because perpetual futures allow leverage, skeptics warn they can fuel a downward spiral during periods of market stress. Unlike margin calls in traditional markets, where brokers typically request additional collateral before taking action, traders' positions in perpetual futures contracts are designed to liquidate automatically during severe market drops to protect the trading platform's cash reserves.
The mechanism, called auto-liquidation, can result in massive losses during crashes. For example, President Trump's surprise announcement of 100% tariffs against China on Oct. 10 triggered a violent selloff that erased more than $19 billion in leveraged positions.
CME Chief Executive Terry Duffy has publicly criticized the launch of perpetual futures in the U.S., stating at a Piper Sandler conference in early June that he is concerned about the high leverage available on offshore perpetual futures, which sometimes offer traders exposure to assets that are magnified by more than 100 times.
"I totally disagree with the government," Duffy said. "I don't like to see people that don't understand products to potentially get blown out of a contract that they shouldn't be in in the first place."
The incumbents recognize a serious threat when they see one. On Thursday, CME sued the CFTC over its approval of perps in the U.S., alleging that allowing Kalshi to list perps violates federal law and has inflicted "textbook competitive injury" on the exchange. Kalshi, Coinbase and the CFTC said that they view the lawsuit as an attack on market competition.
Tarek Mansour, Kalshi's chief executive, said that the company offers up to around six times leverage on its perpetual futures, comparable with the extra exposure offered on traditional futures, and that perps aren't any riskier than their traditional counterparts. He added that an advantage of perpetuals is that because they never expire, they don't have fees that can be incurred from rolling over the contracts like traditional futures.
"The demand is abundantly clear," Mansour said in an interview. "The incumbents don't like them because now there's competition."
Coinbase recently said that it is launching perpetual futures tied to stock indexes tracking artificial intelligence, China, defense and the top 100 Nasdaq-listed companies with up to 20 times leverage. Coinbase, which is the largest U.S. crypto exchange, has been offering perpetual-style futures contracts in the U.S. since July 2025. A spokeswoman for the company said it has seen more than $211 billion of notional volume in these contracts since then.
"Perp--style contracts and perps are effectively the same thing -- the difference is a tiny nuance," said John D'Agostino, head of strategy at Coinbase Global's institutional business. "It's a bit disingenuous that everyone is suddenly concerned now. The real concern is people realizing how popular the product is and how much attention it might pull from traditional futures."
Perpetual futures gained mainstream attention earlier this year when traders on decentralized crypto exchange Hyperliquid took advantage of their 24/7 availability to bet on oil prices during the Iran war and when traditional markets were closed. Hyperliquid isn't accessible to U.S. residents, but many traders have circumvented the restrictions by using virtual private networks.
Some exchanges say they are open to launching their own perpetual futures. Stuart Williams, chief operating officer at ICE, which owns futures exchanges, said he views perpetual futures as being riskier than their traditional counterparts. While the company doesn't currently have plans to launch its own perpetual futures, it is open to doing so if it sees demand from institutions, with different mechanisms to address its concerns with perps.
"Not a single customer has asked us for perps, but we're going back out, and we'll be seeing if there's any opportunity that we can see in that space," said Williams.
Nasdaq is watching the development around perpetual futures and waiting for more clarity before taking any action, according to a person familiar with the matter. Anything the exchange launches would have to meet investor-protection requirements, the person said.
Rob Hocking, Cboe's global head of derivatives, said that the derivatives exchange is considering converting its continuous futures tied to bitcoin and ether, launched in December, to perpetual futures. The contracts currently have expirations that extend up to a decade. The CFTC recently said that it would allow registered U.S. platforms holding perpetual-style contracts to relist them as true perpetual-futures contracts.
While Kalshi doesn't currently receive fees from the trades, the company said it has asked the CFTC for approval to charge fees and expects to get a nod as soon as this week. Kalshi said that institutions such as market makers and crypto hedge funds have made up most of the trading volume tied to perpetual futures, though individual traders who trade options and futures have also been jumping into perps.
While perps may have drawn a lot of attention, and at least one prominent lawsuit, some industry analysts aren't sure they will expand broadly beyond their crypto roots.
"If the Commission views 24/7 traditional futures as a potential volatility amplifier during stress, the case against approving perpetuals on the same asset classes is arguably even stronger," Piper Sandler analysts wrote in a recent note.
Write to Krystal Hur at krystal.hur@wsj.com and Vicky Ge Huang at vicky.huang@wsj.com
(END) Dow Jones Newswires
June 22, 2026 21:00 ET (01:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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