Race for ‘Perps’ Comes to the U.S., as Prediction Markets Eye Crypto’s Most Lucrative — and Volatile — Frontier

A quiet but consequential shift is underway in U.S. financial markets. Perpetual futures, long a staple of offshore crypto exchanges, are edging toward mainstream adoption domestically, drawing interest from prediction market platforms and raising fresh questions about risk, regulation, and market structure.

Known as “perps,” these derivatives have no expiration date and allow traders to take highly leveraged positions, sometimes up to 100 times their capital. Their appeal is continuous exposure to price movements without the need to roll contracts. Their risks are less benign. Liquidation cascades, extreme volatility, and opaque pricing mechanisms have defined their growth outside the United States.

Now, that model is inching closer to U.S. shores.

The scale of the opportunity explains the urgency. Perpetual futures accounted for more than 70% of trading volume on centralized crypto exchanges last year, according to CoinGecko. Data from CryptoQuant shows volumes reached a nominal $61.7 trillion in 2025, dwarfing the $18.6 trillion recorded in spot markets. That imbalance underscores how speculative leverage, rather than outright ownership, has become the dominant driver of activity in digital assets.

For platforms like Kalshi and Polymarket, the attraction is clear. Both firms sit at the intersection of finance and real-world event speculation. Adding leveraged derivatives would deepen engagement among existing users while opening a path to compete more directly with established crypto exchanges and retail brokerages.

Still, analysts caution against overstating the immediate threat to incumbents such as Coinbase and Robinhood. Owen Lau of Clear Street described the move as incremental rather than disruptive.

“This is a natural product extension,” he said, noting that shifting entrenched users away from established platforms remains difficult.

Others see defensive logic at play. Mizuho analyst Dan Dolev argued that prediction markets are moving preemptively to avoid being sidelined. As traditional platforms expand their own derivatives and event-based offerings, the boundaries between trading, betting, and forecasting are dissolving. Robinhood’s own push into prediction markets, which quickly became one of its fastest-growing revenue segments, illustrates how quickly user demand can pivot when new instruments gain traction.

At the center of this shift is regulation. Historically, U.S. authorities have kept perpetual futures at arm’s length, largely due to their embedded leverage and the systemic risks tied to auto-deleveraging mechanisms used offshore. These systems can force mass liquidations during market stress, amplifying price swings and triggering abrupt losses.

That stance may be softening as the Commodity Futures Trading Commission has signaled a willingness to develop a framework for what it calls “true perpetual derivatives.” Chairman Michael Selig said earlier this year that regulators intend to bring such products onshore “subject to appropriate safeguards,” marking a shift from prohibition to controlled adoption.

The implications extend beyond crypto. Some analysts believe that if structured carefully, perpetual contracts could migrate into traditional asset classes, from equities to commodities. That prospect introduces both opportunity and unease. Extending high-leverage instruments to markets like the S&P 500 or energy futures could deepen liquidity, but it could also import the instability seen in crypto trading.

There is also the question of market integrity. Prediction markets, already under scrutiny for alleged misuse of insider information and manipulation of underlying data, could face intensified oversight if paired with leveraged derivatives. The combination raises the stakes. A trader with both informational advantage and leverage can exert outsized influence, potentially distorting not just prices but perceptions of real-world probabilities.

Even so, the commercial incentives remain powerful. The overlap between crypto traders and prediction market users is substantial, creating a ready-made customer base for hybrid products.

What remains uncertain is whether the infrastructure and safeguards can keep pace. Pricing models, margin requirements, and settlement mechanisms are expected to determine whether these products stabilize or destabilize markets. This is because, without careful calibration, the same features that make perps attractive could magnify systemic risk.