A prediction markets startup is now pressing into some of the most heavily traded corners of global finance — and the established players are not happy about it. Kalshi, which launched the United States’ first regulated perpetual futures derivatives contracts in May after receiving CFTC approval, is now in advanced talks with regulators to bring those same never-expiring instruments to metals, foreign exchange, and energy markets.
Summary
Key takeaways
- Kalshi launched the US’s first regulated crypto perpetual futures in May following CFTC approval, generating $16.1 billion in trading volume since launch.
- The company is in advanced discussions with the CFTC to expand perpetual futures to metals including gold, foreign exchange, and energy commodities.
- Perpetual futures allow traders to hold positions indefinitely and use leverage of up to 50 times the contract value.
- CME has sued the CFTC and its chairman Michael Selig, challenging approvals that allowed Kalshi and Coinbase to list perpetual contracts.
- Offshore perpetual futures markets were estimated at $90 trillion in volume last year, signaling the scale of demand that could migrate onshore.
Kalshi’s push into new asset classes
The crypto launch was just the opening move. Kalshi’s chief risk officer Udesh Jha confirmed the company is actively pursuing regulatory clearance to extend perpetual contracts beyond cryptocurrency into foreign exchange, metals, and energy — asset classes where geopolitical volatility and seasonal price swings generate persistent investor demand.
“The other asset classes that we’re looking at are very much driven by the market, for instance, things like gold,” Jha said. Gold, in particular, stands out as a near-term priority. Jha described it as “retail friendly,” noting that Kalshi’s participant base skews toward retail while also attracting institutional money — a mix that makes gold an especially logical next step.
Beyond those three categories, Kalshi is also eyeing broad-based indexes and individual stocks for potential perpetual futures expansion, though those remain further out in the pipeline.
Why FX, metals, and energy first
“FX, metals, and energy are probably the ones that because of geopolitics and seasonality are the most in demand from investors,” Jha noted. That framing is deliberate. By leading with the asset classes investors already actively want exposure to — rather than the ones easiest to build products for — Kalshi is positioning itself as demand-responsive, not just product-driven.
If approved, trading in these new categories would occur during regular market hours rather than around the clock, according to a person familiar with the matter who declined to speak publicly given the products are still under regulatory consideration.
What perpetual futures actually are — and why they matter
Perpetual futures, often called “perps,” are derivatives contracts with no expiration date. Unlike standard futures, which require traders to either close or roll positions at a fixed settlement date, perps allow investors to hold a position for as long as they choose. That structural difference is significant: it removes the friction of contract rollovers and makes maintaining long-term directional exposure far simpler.
The leverage component is where the risk concentration lies. Traders can borrow up to 50 times the value of their contract, meaning even small price moves in the wrong direction can wipe out a position entirely. Critics have pointed to this combination of indefinite holding periods and extreme leverage as a recipe for retail investor losses, particularly for those who may not fully understand the mechanics involved.
Until recently, perps existed almost entirely offshore, in a regulatory gray area — neither explicitly approved nor banned in the US. Kalshi has estimated that perpetual futures trading on overseas platforms reached $90 trillion in 2023, a figure that underscores the enormous volume of activity that US-regulated venues have so far been locked out of.
Regulatory landscape and the CME lawsuit
The CFTC’s decision to open the door for US-listed perpetual futures has triggered one of the more dramatic regulatory showdowns in the derivatives industry in years. CME’s outgoing CEO Terry Duffy publicly condemned the CFTC in June, calling perps “a disaster waiting to happen.” Shortly after, CME took the extraordinary step of suing the CFTC and its chairman, Michael Selig, directly challenging the approvals that allowed both Kalshi and cryptocurrency exchange Coinbase to list perpetual contracts.
Most market observers read the lawsuit as something more strategic than principled. CME’s position as the dominant US derivatives exchange — built over decades — faces a genuine structural threat if perpetual futures gain mainstream traction. A legal challenge that slows or constrains CFTC approvals for new asset classes would buy time for established players to adapt or lobby for their own access.
CFTC’s own expansion process
The regulator itself is not standing still. In June, the CFTC launched a public consultation process on whether perpetual futures should be extended to storable energy commodities such as crude oil. That move signals the agency views the crypto launch as a pilot rather than a ceiling — and that it is building the evidentiary record needed to defend further approvals against legal challenge.
Market impact: $16.1 billion in and counting
The market’s response to Kalshi’s crypto perpetuals launch has been substantial. Since going live, the platform has recorded $16.1 billion in trading volume on perpetual contracts, with institutional investors accounting for the bulk of activity. That traction matters for the regulatory argument: it’s harder for critics to call perps a fringe product when the numbers show deep and immediate market adoption.
The competitive signal was not lost on Wall Street. When the CFTC first approved perpetual futures for US-regulated venues, shares of CME, CBOE, Nasdaq, and Intercontinental Exchange all sold off sharply as investors priced in the prospect of a new class of competitor siphoning volume from traditional derivatives venues. That market reaction was a candid assessment of the disruption potential Kalshi represents.
Kalshi co-founder Tarek Mansour had telegraphed the expansion ambition in June, telling Bloomberg the company intended to move into additional asset classes — though without specifying which ones at the time. The details now emerging from Jha’s comments fill in that picture considerably.
The deeper question hanging over all of this is whether the CME lawsuit succeeds in complicating CFTC approvals for non-crypto perpetuals, or whether the regulator’s public consultation process on energy commodities effectively insulates future decisions from legal challenge. The answer will determine whether Kalshi’s ambitions remain in the draft stage or reshape how American investors trade gold, oil, and currencies entirely.
FAQ
What are perpetual futures and how do they differ from traditional futures?
Perpetual futures are contracts with no expiration date, allowing investors to hold positions indefinitely. Traditional futures contracts have a fixed settlement date, requiring traders to close out or roll their position. Perps also typically allow higher leverage — up to 50 times the contract value in Kalshi’s case.
Which asset classes is Kalshi planning to introduce perpetual futures for beyond cryptocurrency?
Kalshi is seeking CFTC approval to expand perpetual futures to metals including gold, foreign exchange, and energy markets. The company is also exploring potential offerings tied to broad-based indexes and individual stocks, though those are further out in the process.
Why is there criticism and legal challenge against perpetual futures in the US market?
Critics, including CME’s outgoing CEO Terry Duffy, warn that perpetual futures pose serious risks to retail investors due to their complexity and extreme leverage potential. CME has gone further, suing the CFTC and chairman Michael Selig to challenge the regulatory approvals that permitted Kalshi and Coinbase to list these products — a move widely seen as an effort to protect CME’s position as the leading US derivatives exchange.
Who are the primary users of Kalshi’s perpetual futures so far?
Most of the $16.1 billion in trading volume generated since Kalshi’s launch has come primarily from institutional investors, though retail participation is a meaningful and growing component — particularly in gold-linked products, which Kalshi describes as especially retail-friendly.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
