In #Crypto investing, a perpetual future (or “perp” for short) is a type of contract allowing you to wager on the price of a crypto asset without ever actually owning it, and with no set expiration date. This means exchanges use a periodic “funding rate” — typically reset every 8 hours — that anchor contracts to the asset’s real-world “spot” price. If the perp is trading above the spot price, longs pay shorts. Otherwise, shorts pay longs.
Typically, these kinds of trades require leverage, which is what can make them particularly risky. If your position shifts quickly and dramatically, you could be liquidated before having a chance to react. They remain popular financial products because of their unique advantages, allowing traders to speculate on the direction a token’s price will take without actually owning that token, and opening up more opportunities to short particular coins and thereby hedge an existing position.
Globally, perps are the most traded crypto instruments by volume, but they’ve been largely out of reach for US investors operating within regulated markets. Until now.
The US Commodity Futures Trading Commission (CFTC) announced a fresh set of conditions on Friday that will theoretically allow US platforms to offer crypto perpetuals. We include the word “theoretically” here with purpose. This is more of a roadmap laying out how US exchanges could one day offer perps, as opposed to an outright declaration that they’re now widely available.
As CFTC Chairman Mike Selig phrased it in his X announcement, the agency is now “charting a path for one of the most liquid segments of the crypto asset markets to exist within the US regulatory framework.”
The CFTC also approved prediction market Kalshi to list BTCPERP Contract, a perpetual contract referencing the spot price of Bitcoin. So this shift is already moving out of the theoretical space, and signaling that perps are likely headed to US exchanges sooner rather than later. Multicoin Capital co-founder (and friend of the pod) Kyle Samani suggests that widespread trading of perps in the US will likely still hinge on the passage of the CLARITY Act by Congress
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US Paves Way for Onshore Crypto-Linked Perpetual Futures
For years, the most popular way to trade crypto — a never-expiring, highly leveraged contract called a perpetual future — has existed almost entirely beyond the reach of US regulators, thriving on offshore exchanges that operate outside American law.