The crypto market’s most traded product—perpetual swaps—is finally arriving on U.S. regulated exchanges, but the biggest Wall Street institutions are staying away, according to the original C
The crypto market’s most traded product—perpetual swaps—is finally arriving on U.S. regulated exchanges, but the biggest Wall Street institutions are staying away, according to the original CoinDesk report. The sheer size of the global perpetuals market, with volumes estimated above $90 trillion, underscores the scale of the opportunity, yet traditional banks are worried about liquidity fragmentation, legal clarity, and the cost of building new trading infrastructure.
Crypto-native exchanges and nimble trading firms are not waiting. They are moving aggressively to capture retail and institutional demand, launching regulated perpetuals on U.S.-licensed platforms. For them, this is the culmination of years of pushing for onshore futures that mirror the perpetual contracts that dominate offshore venues like Binance, Bybit, and OKX. The first movers see a path to dominance if they can offer the same leverage and ease of use within a compliant framework.
For a bank, the calculus is different. Perpetual swaps require deep, continuous liquidity and robust margining engines that can handle extreme volatility. The fragmented market structure in the U.S. means no single exchange has yet gathered enough order flow to give confidence. Most banks would rather wait until a clear winner emerges or until multiple venues link up via some kind of aggregated order book.
This cautious stance aligns with aggressive lobbying by traditional banks to kill major crypto legislation just days before a Senate vote. The episode revealed how uneasy deposit-taking institutions remain about any asset class that competes with traditional payments and custody services. Perpetual futures, with their embedded funding rate mechanisms, look alien to legacy risk systems. Building a bridge to that world is expensive and, for now, optional.
Even the regulators are still writing the finer rulebook. While the Commodity Futures Trading Commission has approved certain contracts, questions around margining, cross-margining with spot, and customer asset segregation are being worked through in real time. A bank that jumps in too early could find itself on the wrong side of a compliance interpretation, facing criticism from shareholders who remember the costly fintech bets of the last cycle.
Retail traders have long preferred perpetuals over dated futures because they don’t expire and track the spot price closely via a funding rate. The offshore market’s volume dwarfs that of spot trading. Now, with a legal path open, platforms like Coinbase and Kraken are expanding their derivatives arms to offer exactly that experience. Non-bank market makers such as Jump and Jane Street are reportedly preparing to provide liquidity, recognizing that a regulated perpetual market could pull volume back onshore and create a new profit pool.
Institutional demand is more nuanced. While some hedge funds have used offshore perpetuals for years, many pension funds and asset managers cannot touch them until they are fully regulated and custodied. That threshold is inching closer. As crypto becomes more woven into mainstream portfolio allocations, the availability of regulated perpetuals could accelerate the build-out of derivatives strategies that were once only possible at unregulated venues.
The infrastructure underneath isn’t the bottleneck. Developer activity on blockchains like Ethereum and Solana remains high, and the existing exchange technology is mature. The real gap is the traditional banking layer’s willingness to connect to these markets. Settlement, prime brokerage, and clearing are still controlled by institutions that have other priorities.
Meanwhile, other corners of institutional crypto are moving faster. Tokenization of real-world assets has crossed $20 billion on-chain and attracted firms like JPMorgan for settlement trials. But tokenization touches custody and bonds, familiar territory for banks. Perpetual swaps, with their crypto-native architecture and 24/7 trading, are a different animal. The banking sector’s response has been to watch, not to engage.
What remains uncertain is whether this hesitation is temporary or structural. If the U.S. perpetual market gains traction without them, banks may find themselves locked out of a critical revenue stream when they finally do show up. Crypto-native incumbents could build moats that are hard to cross. For now, though, the road is wide open for the non-banks, and that alone is rewriting the competitive map for the $90 trillion product that crypto traders can’t live without.
