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As a crypto investor, I was really excited to hear that Coinbase got the green light from the CFTC on May 29, 2026, to offer perpetual futures contracts to us in the US. It’s a big deal because they’re the first American exchange to offer this type of product, and it’s incredibly popular worldwide. This opens up a lot more trading opportunities for US investors like me!

Summary

Perpetual futures, often called “perps,” are a type of leveraged investment that doesn’t expire. They’ve become incredibly popular, with over $61.7 trillion traded in 2025 – a 29% increase from the previous year. In fact, they make up as much as 90% of all crypto derivative trading, according to some reports. Until recently, traders in the US haven’t been able to easily access these investments, needing to use exchanges located outside the country or avoid them completely.

Coinbase CEO Brian Armstrong explained that, until now, most US customers haven’t been able to participate in the global cryptocurrency market – missing out on around 80% of it. Coinbase is fixing this by directing customers to Deribit, the exchange it recently purchased for $2.9 billion, and by launching a new type of futures trading in the US on July 21st.

The CFTC also gave the green light to Kalshi’s BTCPERP, a new Bitcoin perpetual contract offered on a U.S. exchange – a first for the country. This is a significant step forward for U.S. crypto derivatives, representing the biggest increase in access since the launch of spot Bitcoin ETFs earlier this year. The approval came at a time when a surge in leveraged trading led to $1.8 billion in liquidations, highlighting the potential impact – and risks – of this new product. Here’s a breakdown of the changes and why they’re important.

What a perpetual future actually is

It’s important to understand how this product works before considering its benefits, as perpetual contracts (perps) function differently than traditional futures contracts.

Traditional futures contracts have an expiration date. You commit to buying or selling something at a specific price on a future date. Once that date arrives, the contract is finished. If you want to keep your position, you need to “roll” the contract – essentially closing out the old one and opening a new one that expires later. This process involves costs and effort.

Perpetual futures contracts don’t expire, meaning you can hold them for as long as you like without needing to renew or settle them. To ensure the contract price stays close to the current market price of the underlying asset, they use something called the funding rate. This involves regular payments exchanged between buyers and sellers. If more traders are betting the price will go up (long positions), they pay those betting it will go down (short positions), and vice versa. This funding rate is a key feature that allows a contract with no expiration date to accurately reflect the actual price.

Perpetual futures, or ‘perps,’ are also notable for their high leverage – often up to 50 to 1. This means a trader can control a position fifty times the value of their initial investment, which is a major draw – and a significant risk. While a small price increase can lead to large profits, a small price decrease can completely eliminate their investment. This combination of no expiration dates and high leverage is why perps have become the most popular way to trade crypto globally, and why US regulators have been hesitant to embrace them.

Why US traders were locked out

This approval is a big step forward because, until now, the most popular cryptocurrency product wasn’t available to investors in the United States.

Perpetual futures contracts first appeared on crypto exchanges outside the United States around 2017 and rapidly became the most popular way for traders to use leverage in the crypto market worldwide. However, these contracts developed outside of US regulations, on platforms not overseen by American authorities. US residents generally couldn’t access these offshore exchanges directly. This created a legal uncertainty: the product wasn’t specifically illegal for US retail investors, but it also wasn’t easily available through standard, regulated US channels.

American traders faced limited and imperfect choices. They could use standard CME futures, which are regulated but have expiration dates and don’t exactly match current market prices. They could create complicated investment strategies to simulate continuous exposure. Or they could attempt to trade on foreign exchanges, which involved significant legal, security, and risk concerns. None of these options were as straightforward as simply trading a perpetual contract, which was the standard practice everywhere else.

Armstrong’s statement that 80% of global cryptocurrency trading happens outside the US highlights how much of the market Americans are missing. Since most crypto trading involves complex derivatives called ‘perps’ – which are difficult for US traders to access – Americans have been largely excluded from how crypto is actually bought and sold. The recent approval from the CFTC signals that keeping US traders out of this market caused more problems than it solved, simply driving the activity to other countries.

What the CFTC actually approved

The May 29 action was really two moves, and understanding the structure matters.

Coinbase recently received approval that allows its US customers to trade perpetual contracts on the Deribit exchange, which Coinbase acquired last year for $2.9 billion. This approval effectively makes that acquisition worthwhile for American users, as it allows them to access a wider range of crypto derivatives. The approval covers various “digital commodities” currently available on Deribit, including popular cryptocurrencies like Bitcoin, Ethereum, and Solana, as well as more unusual assets like Dogecoin and even the TRUMP meme coin. While Coinbase hasn’t announced exactly which assets will be available immediately, they are also planning to launch their own US-based perpetual futures product on July 21st, designed to comply with US regulations.

Kalshi also received approval from the CFTC. They’re now authorized to list BTCPERP, a new type of Bitcoin perpetual contract, making it the first of its kind traded on a regulated US exchange. This differs from Coinbase’s approach, which connects users to exchanges outside the US. Instead, Kalshi is offering a Bitcoin product created and regulated within the existing US financial system.

These actions create a regulated pathway for a product that has largely operated overseas. However, the CFTC proceeded cautiously, stating they will individually review perpetual futures contracts. The approved versions include safety measures not found in offshore products, such as higher margin requirements, limits on position sizes, tools to manage volatility, and identity verification for traders. While maintaining the funding-rate mechanism that defines perpetual futures, the regulators have added safeguards to make them more accessible and stable for a wider range of traders.

The real target is Hyperliquid

Okay, putting aside all the legal jargon, it’s pretty clear this move is mostly about going after Hyperliquid. It feels like a direct challenge to them in the market, honestly.

As a researcher tracking decentralized finance, I’ve observed that Hyperliquid has quickly become the leading platform for perpetual futures trading. What’s interesting is that its popularity stems from features that traditional, CFTC-regulated products simply can’t offer. Traders are drawn to the ability to fully control their own funds, the lack of KYC requirements, and the potential for extremely high leverage. Plus, the platform’s permissionless nature allows for the listing of a wide range of assets, even those considered niche or unusual. For a specific type of trader, this combination of freedom and flexibility is the primary benefit – and it’s precisely what regulators are unlikely to approve.

US-regulated crypto products are designed very differently from those available offshore. They require customer identification (KYC), limit how much traders can borrow (leverage), restrict position sizes, manage market volatility, and only offer approved cryptocurrencies. While bringing perpetual futures contracts (perps) under US regulation with the CFTC does mean they are more controlled, Coinbase and regulators believe many traders – particularly large institutions like hedge funds and family offices – want to trade perps but couldn’t while they were only available in unregulated markets. For these traders, a regulated version isn’t a step down; it’s the first version they’re legally able to access.

Looking at the actual trading numbers, these two markets – decentralized platforms like Hyperliquid and regulated exchanges like Coinbase – aren’t competing as directly as it seems. While Hyperliquid handles a small portion of total perpetuals trading, most volume still happens on traditional offshore exchanges. The new, regulated products are much more likely to attract large institutional investors who haven’t been involved at all, rather than users who specifically choose platforms like Hyperliquid because they avoid regulations. Coinbase isn’t trying to win over those existing Hyperliquid users; they’re focused on a much larger group of people who haven’t yet entered the market.

The timing is its own warning

It’s striking that approval for this highly leveraged product came at the same time we saw a stark example of the risks associated with such leverage. The timing feels particularly ironic and deserves consideration.

Shortly after the approval, the crypto market experienced a rapid series of liquidations, totaling around $1.8 billion over three days, primarily affecting highly leveraged positions as the market corrected. Additionally, a sudden price drop in a specific, less-traded contract on Hyperliquid – linked to a SpaceX valuation – erased approximately $1.5 million in value within half an hour. While these events don’t necessarily invalidate the recent decision, they clearly demonstrate the inherent risks involved.

The core issue with approving these financial products is the risk they pose to everyday traders. Regulators have always been concerned that using high leverage – like 50-to-1 – means even a small market shift can wipe out an investor’s entire investment. Bringing these products under US regulation doesn’t eliminate that risk, but it does allow for rules about margin, position limits, and oversight. The idea is that it’s better to monitor and manage the risk within the US system than to have it happening offshore with no oversight. The CFTC concluded that Americans would trade these products regardless, so it’s preferable to have that activity happen domestically, where it’s regulated and transparent. The big question now is whether the safeguards in place are sufficient to protect less experienced traders from such a powerful and potentially risky product, especially given the recent market volatility and liquidations.

What it means

Coinbase receiving approval to operate is a fundamental change that will likely have a bigger long-term impact than the current news about falling prices. It’s a significant development that’s being overlooked right now.

This development finally gives US traders, particularly large institutions, a legal way to trade the most popular cryptocurrencies. It’s a major step forward in access, similar to how the approval of spot Bitcoin ETFs in 2024 brought more institutional investment into Bitcoin itself. We could see the same thing happen now – a regulated framework allows institutions to invest in a market they previously couldn’t, potentially unlocking significant new capital.

As a crypto investor, I’m seeing a really interesting shift. For a long time, US-based investors had to go overseas for perpetual futures trading. Now, platforms like Coinbase and Kalshi are stepping up and offering similar products right here in the States. Coinbase, backed by Deribit’s trading volume, is aiming to be *the* place for institutions to trade perps onshore. Kalshi’s actually building these products natively within the US regulatory framework, which is a big deal. While some traders will always prefer the freedom of offshore platforms like Hyperliquid, the big institutional money was never really theirs to begin with, and is now likely to stay within regulated US exchanges.

The most important outcome is the clear message from regulators. By establishing rules for perpetual futures contracts, the CFTC is bringing crypto derivatives *into* the established US financial system, rather than trying to block them. This, along with the Chicago Mercantile Exchange’s move to 24/7 trading and the overall improvement of crypto market infrastructure, shows that the traditional financial world and the crypto world are increasingly coming together. The product that previously dominated crypto trading outside the US is now being brought under regulation, and the key question is how much of the $61.7 trillion in yearly trading volume will shift to these regulated platforms. Considering how successful Bitcoin ETFs have been, it would be unwise to assume that these regulated products won’t attract significant investment.

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2026-06-04 16:09