Perpetual futures have been one of crypto’s most popular trading products for years, particularly among investors outside the United States. As the contracts enter regulated American markets, Wall Street is weighing whether they are a short-lived retail trend or a durable challenge to traditional futures.

The early numbers have been difficult to ignore.

Kalshi’s perpetual futures surpassed $1 billion in trading volume within a week of their June launch, marking the exchange’s biggest product debut since prediction markets. The company has since sought regulatory approval to offer perpetual futures linked to gold and silver, suggesting the product may not remain limited to bitcoin (BTC) and other digital assets.

Perpetual futures, often called perps, function much like standard futures contracts but do not expire. Traders do not need to close positions or roll them into new contracts each month or quarter. Instead, periodic funding payments help keep the contract price close to the underlying asset.

The product has become central to global crypto trading. Bank of America has estimated annual perpetual futures volume at about $90 trillion.

On May 29, the Commodity Futures Trading Commission (CFTC) cleared Kalshi to offer the contracts. Coinbase (COIN) also received approval to list regulated perpetual futures in the U.S., putting a product long associated with offshore crypto venues into a more familiar U.S. regulatory setting.

Inside Wall Street, however, interest has not translated into immediate adoption.

People familiar with the discussions said perps are being raised more often, in part because U.S. regulators are allowing markets that once operated offshore to move onshore. Even so, most large financial institutions are still studying the product rather than preparing major launches. The first movers are expected to be proprietary trading firms, market makers and newer clearing firms.

Unlike large banks, proprietary trading firms trade their own capital. That gives them more flexibility to test new venues, accept operational risk and step back if the economics no longer work. Big banks face stricter capital requirements, client obligations and reputational risk. For them, the potential profit in a young market may not yet justify the cost of building compliance, clearing and risk systems around it.

That distinction matters because “Wall Street” includes several groups moving at different speeds. Individual traders and smaller firms typically arrive first. Market makers usually follow once volume grows. Banks generally want years of data, clear regulatory treatment and stable infrastructure before committing significant balance sheet.

Still, the potential use cases extend beyond speculation. Perps could help traders manage weekend risk. Traditional futures markets are closed for part of the weekend, even though wars, elections and policy decisions continue. A trader with options exposure on Friday may have to wait until Sunday night to hedge a sharp move.

A liquid 24-hour perpetual market could change that. Firms could adjust positions as events unfold and then use weekend prices to estimate where CME futures may reopen. Insiders said that could make perps useful both as a hedge and as a source of price discovery, which helps explain why the product is drawing attention beyond crypto-native venues.

"The demand has to be there, or the capital won't be," one industry insider said, arguing that firms will not commit balance sheet until customer activity justifies it.

Depth remains the key obstacle. A contract may trade around the clock, but that does not mean institutions can move large positions without affecting the market. Weekend liquidity is still thin, and collateral systems do not always move as quickly as the markets they support.

A regulatory dispute is also taking shape. One major question is whether some perpetual contracts should be treated as futures or swaps. That distinction affects margin rules, registration obligations and who can provide liquidity. Industry insiders said those legal questions may become more important as exchanges push perps into commodities, equities and other traditional markets.

The debate is also becoming competitive. CME has challenged the CFTC’s treatment of Kalshi’s bitcoin perpetuals, arguing that the contracts should be regulated differently. Similar disputes could emerge if exchanges try to expand perpetuals into equities and other asset classes.

"A lot of this stuff... is more commercial than people are going to admit to out loud," another industry insider said, suggesting that some opposition reflects incumbent exchanges protecting existing businesses as much as concerns about market structure.

For now, Wall Street’s stance is cautious rather than hostile. Trading firms see a product they understand, regulators see a market moving onshore and exchanges see a chance to capture new volume.

The largest banks, though, are unlikely to lead. They are expected to wait for the rules, liquidity and infrastructure to catch up.