Kalshi is attempting to bring one of the most unique cryptocurrency trading products to traditional markets. On August 18, the federally regulated exchange submitted two proposals to the CFTC for approval of perpetual futures contracts based on a major U.S. stock index and copper. If approved, these contracts would bring a structure that originated in the cryptocurrency sphere to stock and commodity markets.
This is significant because perpetual futures, or "perps," have become an integral part of crypto trading. Researchers from Cornell University estimate that perpetual futures account for 93% of all cryptocurrency derivative trading volume. The reason for their popularity is simple. Traders can maintain leveraged trades without the need to renew contracts upon expiration, while simultaneously receiving regular payments that keep the prices aligned with the underlying market.
The idea of perpetual futures is not new. Economist Robert Shiller proposed a structure for trading perpetual futures back in 1993.
"A perpetual futures contract is proposed, under which cash payments will be made every day..." — Robert J. Shiller, 1993.
However, the product gained wider recognition specifically within the cryptocurrency sphere.
Stock Index and Metal, with Prices Derived from Python Data
Kalshi's US500 contract will track the MerQube US Large Cap Index, which consists of the 500 largest companies listed on U.S. exchanges and uses free-float adjusted market capitalization to determine their weighting.
The second proposed contract, COPPERPERP, is used to measure the current price of copper in dollars per pound using XCU/USD data from the Python network.
Currently, neither product has been approved. Their applications fall under Regulation 40.3, meaning Kalshi must await CFTC sanction before launching the products for sale.
Perpetual contracts differ in structure from regular futures contracts in that they have no expiration date. Traders can hold long or short positions indefinitely, with funds being paid out to maintain the perpetual contract's price alignment with the underlying asset.
From Bitcoin in May to Stocks in August
Kalshi's move towards non-crypto assets came after a regulatory easing earlier this year.
On May 29, the CFTC approved Kalshi's Bitcoin contract, issuing a statement indicating that other perpetual contracts would be reviewed under Regulation 40.3.
Bitcoin perps were launched in early June, later joined by Ether, XRP, and several other crypto assets.
As Cryptopolitan reported, Kalshi now offers perpetual contracts for 13 cryptocurrencies.
The stock index and copper perps take this idea much further. For an exchange best known for its event contracts, this is another step towards competing as a broader derivatives trading platform.
Why Crypto Traders Should Pay Attention to Copper Contracts
However, the broader question is not about copper itself, but whether a trading approach rooted in cryptocurrency can be beneficial for traditional assets.
In its "Crypto Market Evolution Forecast 2026" report, Coinbase Institutional put forward this idea.
"The use of digital assets as collateral could become the preferred choice for a new generation of retail traders." — Coinbase Institutional
Coinbase highlights constant availability and efficient use of capital as key advantages. Furthermore, the firm believes perpetuals have evolved beyond being just leveraged products and are gradually becoming elements of lending, collateral, and hedging systems.
If regulated U.S. exchanges can successfully attract traders for stocks and commodities, cryptocurrency would be exporting one of its most efficient market structures to traditional financial markets. Moreover, this could create a more competitive environment for trading volumes as traditional and crypto-focused platforms continue to intertwine.
A Small Book Gaining Momentum Rapidly
Currently, Kalshi's business capacity for perpetual contracts is limited.
According to Cryptopolitan, Kalshi's daily open interest for crypto perps reached a record high of $17.98 million. For comparison, Hyperliquid had an open interest of about $11.7 billion across 377 trading pairs, meaning Kalshi currently holds only about 0.15% of that amount.
However, its expansion has been rapid. Kalshi's perp order volume reached $1 billion in the week after launch, while the company's event contract business took about 40 months to reach that milestone.
But such expansion comes with risks. In June, the CME Group filed a lawsuit against the CFTC and its Chairman Michael Selig regarding the approval of Kalshi's Bitcoin contract, as well as the general policy on perpetual contracts. CME argues that this type of offering should be classified as swaps, not futures.
This case, along with the CFTC's review of the documents Kalshi filed in August, will ultimately determine whether US500 and COPPERPERP reach the market.
