Key Takeaways
- • Kalshi launches regulated perpetual futures for U.S. crypto traders, offering a domestically supervised alternative to offshore platforms that currently dominate the $90+ trillion perpetuals market.
- • Offshore perpetual futures volume surged 221% in two years, growing from $28 trillion in annual volume in 2023 to more than $90 trillion in 2025, demonstrating massive institutional and retail demand for this product class.
- • Regulation serves as Kalshi's competitive differentiation, with funding rates charged every eight hours and visible in transaction history under Commodity Futures Trading Commission supervision, addressing transparency and compliance concerns for institutional clients.
- • Perpetual futures eliminate contract expiration management, enabling hedgers and speculators to maintain continuous price exposure without rolling dated contracts—a critical operational advantage for fund managers and corporate treasurers managing crypto exposure.
- • Polymarket and other prediction market platforms are similarly expanding into perpetuals trading, signaling a strategic pivot by event-contract specialists toward broader derivatives offerings to capture larger trading volumes and institutional liquidity.
Summary
Kalshi, the prediction markets platform, announced Friday it will launch perpetual futures contracts beginning with crypto assets, marking a significant expansion beyond its core event-trading business. The move positions the company to compete in one of cryptocurrency's largest and fastest-growing trading markets while offering U.S.-regulated products to institutional investors currently forced to access offshore venues.
Perpetual futures—or "perps"—are derivative instruments that track an underlying asset's price without a fixed expiration date. Unlike traditional futures contracts that require traders to roll positions into successive expiration dates, perpetuals maintain continuous price exposure through automated funding payments that keep contract prices aligned with spot markets. This design addresses a critical operational pain point for institutional users: corporate treasurers and fund managers can hedge bitcoin or other crypto exposures without managing constant contract rollovers. For example, a cryptocurrency payments company expecting bitcoin inflows could short a regulated BTC perpetual to offset price risk without selecting an expiration date or repeatedly adjusting positions.
The market opportunity is substantial. Offshore perpetual futures volume exploded from $28 trillion in annual volume during 2023 to more than $90 trillion in 2025—a 221% increase over two years—according to Kalshi's data. Despite this explosive growth, U.S. institutions have largely accessed perps indirectly or through unregulated offshore platforms, creating regulatory and operational friction for compliance-conscious investors.
Kalshi's regulatory positioning differentiates its offering. The perpetuals will operate under Commodity Futures Trading Commission supervision, with funding rates charged every eight hours and made visible in transaction history—providing the transparency and compliance infrastructure that institutional investors require. Competitor Polymarket is similarly advancing into 24/7 long-short perpetuals trading, indicating that prediction market platforms broadly are repositioning as full-service derivatives venues beyond binary event contracts.
This expansion reflects a strategic recognition that prediction market platforms can leverage their regulatory licenses and trading infrastructure to capture substantially larger addressable markets in derivatives. For institutional investors, the availability of regulated perpetuals reduces counterparty and regulatory risk compared to offshore alternatives, though market dominance remains concentrated with established offshore venues.
Perpetual futures—or "perps"—are derivative instruments that track an underlying asset's price without a fixed expiration date. Unlike traditional futures contracts that require traders to roll positions into successive expiration dates, perpetuals maintain continuous price exposure through automated funding payments that keep contract prices aligned with spot markets. This design addresses a critical operational pain point for institutional users: corporate treasurers and fund managers can hedge bitcoin or other crypto exposures without managing constant contract rollovers. For example, a cryptocurrency payments company expecting bitcoin inflows could short a regulated BTC perpetual to offset price risk without selecting an expiration date or repeatedly adjusting positions.
The market opportunity is substantial. Offshore perpetual futures volume exploded from $28 trillion in annual volume during 2023 to more than $90 trillion in 2025—a 221% increase over two years—according to Kalshi's data. Despite this explosive growth, U.S. institutions have largely accessed perps indirectly or through unregulated offshore platforms, creating regulatory and operational friction for compliance-conscious investors.
Kalshi's regulatory positioning differentiates its offering. The perpetuals will operate under Commodity Futures Trading Commission supervision, with funding rates charged every eight hours and made visible in transaction history—providing the transparency and compliance infrastructure that institutional investors require. Competitor Polymarket is similarly advancing into 24/7 long-short perpetuals trading, indicating that prediction market platforms broadly are repositioning as full-service derivatives venues beyond binary event contracts.
This expansion reflects a strategic recognition that prediction market platforms can leverage their regulatory licenses and trading infrastructure to capture substantially larger addressable markets in derivatives. For institutional investors, the availability of regulated perpetuals reduces counterparty and regulatory risk compared to offshore alternatives, though market dominance remains concentrated with established offshore venues.
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