U.S. government lifts ban on crypto perpetual contracts for the first time: What does it mean for the market?

Original｜Odaily Planet Daily (@OdailyChina)

Author｜Wenser (@wenser 2010 )

On May 29, the U.S. Commodity Futures Trading Commission (CFTC) released the 7x24 Trading Regulatory Guidance, emphasizing that due to their digital infrastructure and global continuous trading characteristics, crypto-asset related derivatives are more suitable for round-the-clock trading and clearing.

This means that the United States, once seen as a "no-go zone for crypto perpetual contracts," has finally opened up, adding fuel to the country's ambition to become the "Crypto Capital."

Numerous crypto trading platforms and traditional exchanges have quickly responded by launching corresponding trading portals.

The CFTC's Greatest Gift to the Crypto Market: Opening a 24/7 Perpetual Market

According to incomplete statistics, in 2025, the trading volume of crypto derivative perpetual contracts ranged from $60 trillion to $85 trillion, with a single-day peak volume reaching $750 billion, accounting for approximately 75% to 80% of total crypto trading volume. (Odaily Planet Daily Note: Kalshi stated that the total trading volume of this market exceeded $90 trillion in 2025)

However, for U.S. crypto platforms, regulators had never provided clear rules for this massive market.

Now, the U.S. CFTC has officially opened this market, which previously had nearly 0% market share, to U.S. citizens and certain domestic crypto platforms and CEM exchanges. Simultaneously, U.S. institutions and individual users can now trade crypto perpetual contracts seamlessly 24/7, eliminating the previous "time zone" barriers.

CFTC Chairman Michael S. Selig called this a historic step to "bring the world's most active crypto derivatives within the U.S. regulatory framework." This regulatory move quickly triggered execution by leading crypto platforms.

Direct Beneficiaries of the New Policy: Kalshi, Coinbase, CME

On the same day, the CFTC issued an approval order to designated contract market KalshiEX, LLC, allowing it to list the perpetual contract BTCPERP, which references the spot price of Bitcoin, as a futures product. The contract was submitted for approval on May 29, 2026, under CFTC Regulation 40.3. Additionally, Kalshi plans to launch over a dozen crypto perpetual contracts in the future.

Furthermore, Coinbase announced that it has become the first, and currently only, Futures Commission Merchant (FCM) regulated by the CFTC in the U.S., providing American clients access to the global crypto derivatives market, including crypto perpetual contracts and options (connecting to platforms like Deribit, whose Bitcoin options open interest exceeds $31 billion). Coinbase also received approval to allow client crypto assets/stablecoins as margin (with rehypothecation rights).

Finally, CME (Chicago Mercantile Exchange), a traditional trading platform, is also a direct beneficiary of this policy change. Bitcoin futures and options on its Globex platform will transition to 24/7 trading starting this Friday, ending the previous fixed closure from Friday to Sunday, allowing institutional clients to hedge spot volatility seamlessly.

However, this does not mean trading volume will suddenly spike—although the "CME gap" caused by weekend closures will be eliminated, market liquidity remains concentrated in ETF options and offshore perpetual contracts. IBIT options open interest is significantly higher than the CME crypto options market. Currently, short positions among large traders are declining, reducing short-term bearish pressure, but no clear bullish trend has formed yet.

Cautions Behind the CFTC's Guidance: Commodity Differences and Strengthened Authority

Yesterday, in addition to issuing a No-Action Letter to Coinbase, the CFTC also emphasized two points:

1. Traditional commodity derivatives like agricultural products may not be suitable for complete 24/7 operation due to their regional and structural trading characteristics.
2. Regulated trading platforms, swap execution facilities, derivatives clearing organizations, and futures commission merchants must comply with the Commodity Exchange Act (CEA) and related regulations when expanding into 24/7 trading and must proactively assess risk management and operational arrangements.

In other words, 24/7 perpetual trading for agricultural and other commodities is currently not permitted. Moreover, any institution wishing to offer 24/7 derivative trading must communicate with CFTC staff in advance, submit detailed plans and risk analyses, and the CFTC will review compliance on a case-by-case basis.

Thus, the CFTC's move appears to be a "special case treatment" for crypto assets, creating an opening for more crypto platforms to expand their derivatives offerings while further solidifying its regulatory authority over crypto asset derivatives.

Industry Feedback: Overwhelming Praise and Support

The CFTC's regulatory guidance signifies that the U.S. market has truly achieved localized 24/7 trading for crypto derivatives. Liquidity from domestic users previously excluded from the U.S. market is expected to return rapidly, further enhancing domestic institutions' participation, capital efficiency, and reducing risk management costs (such as rollover costs and weekend time gaps).

Strategy founder Michael Saylor stated that the CFTC's guidance promotes the development of the Bitcoin capital market, including 24/7 trading, BTC collateral, perpetual futures, options, and regulated access. This will benefit BTC holders, support the growth of MSTR, and back STRC as a Bitcoin-backed digital credit development.

Coinbase CEO Brian Armstrong cheered: "U.S. users have long been excluded from this 80% of the global crypto market (including perpetual futures and options). But not anymore!"

Kalshi CEO Tarek Mansour said, "This marks Kalshi's evolution from a prediction market leader to a next-generation derivatives exchange. U.S.-based, safe, and regulated perpetual contracts will improve capital allocation and risk management for countless American businesses."

While such praise from beneficiaries is expected, some external observers interpret this as "opening Pandora's box of speculation."

U.S. Public Interest Group: CFTC Ignores Public Interest and Investor Protection

Better Markets, a consumer protection organization founded after the 2008 financial crisis, officially stated, "Retail investors are unlikely to fully understand the risks of perpetual futures. We urged the CFTC last year to require enhanced disclosures that are easier for retail investors to understand. Unfortunately, the CFTC not only failed to require such enhanced disclosures but also appears to have completely ignored the risks of the products it approved."

"This action by the CFTC lacks the decorum expected of a regulatory agency. However, considering Coinbase and Kalshi serve as advisory entities on two CFTC advisory committees, this is not surprising. It is clear the CFTC's work is not for the public interest or investor protection, but for the industries it is supposed to regulate."

These comments directly point to potential conflicts of interest or some degree of internal collaboration between the CFTC and Coinbase or Kalshi.

The U.S. Market Poised for an Explosion in Derivatives Trading

Beyond the direct beneficiaries mentioned above, U.S. crypto exchange Kraken also stated its plan to launch its first CFTC-regulated perpetual futures product for the U.S. market within the next 30 days. The perpetual futures on Kraken Pro are currently provided by NinjaTrader Clearing, LLC (operating as Kraken Derivatives US), a CFTC-registered FCM. Related spot margining and perpetual futures products will be offered on the Bitnomial Exchange (Odaily Planet Daily Note: The latter is a CFTC-regulated exchange recently acquired by Kraken's parent company, Payward).

Regardless of the polarizing reviews, the door to the multi-trillion dollar perpetual derivatives market is slowly opening for U.S. users.