The Race for Perpetual Futures: Prediction Markets Eye the U.S. Crypto Landscape

Title: U.S. Landgrab for Perpetual Futures: Prediction Markets Eye a Slice of the Crypto Pie

In a bold move that could reshape the landscape of American trading, prediction markets Kalshi and Polymarket are reportedly gearing up to enter the high-stakes world of perpetual futures, commonly known as “perps.” This burgeoning sector, which has seen explosive growth since President Trump’s return to office, is becoming a focal point for both traders and regulators alike.

Perpetual futures are unique in that they lack expiration dates, allowing traders to hold positions indefinitely. With the potential for leverage up to 100x, they have become a dominant force in the crypto trading world, accounting for over 70% of all volume on centralized exchanges, according to CoinGecko. In 2025 alone, trading volume for perps soared to a staggering $61.7 trillion, marking a 29% increase from the previous year. In contrast, spot crypto trading reached $18.6 trillion, a mere 9% rise.

The convergence of prediction markets and leveraged trading could revolutionize how Americans engage with real-world events, positioning these platforms in direct competition with established players like Robinhood and Coinbase. However, this potential shift raises concerns among skeptics about increased volatility and the intertwining of crypto with mainstream finance.

A Defensive Strategy

Despite the excitement, analysts are cautious about the implications of this landgrab. Owen Lau, an analyst at Clear Street, downplayed the immediate threat posed by prediction markets to existing crypto platforms. “This is a natural product extension for Polymarket and Kalshi’s existing customers,” he stated. “It would be hard to ask people from Coinbase or Binance to abandon their existing platform and go to them.”

Mizuho’s Dan Dolev echoed this sentiment, suggesting that the move is more about risk management than market dominance. “Eventually, Robinhood is going to want to do it on their own,” he noted, indicating that the entry into prediction markets is a defensive maneuver rather than an aggressive expansion.

Robinhood’s recent partnership with Kalshi has already proven lucrative, with its Prediction Markets hub becoming the platform’s fastest-growing product line, trading 11 billion contracts in 2025 alone. The overlap between the user bases of prediction and crypto markets is significant, making this a strategic move for Robinhood and its competitors.

Regulatory Landscape and Future Prospects

As the U.S. pushes to onshore perps trading, the potential for increased volatility looms large. Lau cautioned that the leverage inherent in these contracts could lead to significant market fluctuations. Historically, U.S. regulators have been wary of allowing such contracts due to the risks associated with auto deleveraging systems used by offshore exchanges, which can trigger cascading liquidations and sharp price drops.

The Commodity Futures Trading Commission (CFTC) has expressed a commitment to creating a regulatory framework for “true perpetual derivatives.” CFTC Chairman Michael Selig emphasized the need for appropriate safeguards to ensure these markets can thrive domestically.

However, prediction markets are not without their challenges. Recent incidents involving alleged insider trading and data manipulation have drawn scrutiny, raising questions about the integrity of these platforms. The integration of crypto could further complicate regulatory efforts, potentially stalling the expansion of these markets.

If successful, the implications could extend beyond crypto, with the possibility of introducing perpetual futures to other asset classes like the S&P 500 or commodities. Lau speculated, “If they bring this concept to the S&P 500, energy, coffee, or Apple stock, it will become a more interesting phenomenon.”

As the battle for perpetual futures heats up, the future of trading in the U.S. hangs in the balance, with prediction markets poised to play a pivotal role in this evolving landscape.