John Palmer, head of derivatives at Kraken, said he expects sophisticated traders to lead adoption of newly approved U.S. perpetual futures, with broader institutional participation likely to follow over time.
The rollout of regulated perpetual futures in the U.S. could follow a familiar path to the one taken by spot bitcoin exchange-traded funds (ETFs) in seeking mass adoption
That's according to a Kraken executive overseeing the exchange's global derivatives business, who said sophisticated traders are likely to be the first institutional users of the newly approved products, while larger asset managers and investment advisers will take longer to enter the market
"When I think about those participants in trading, typically the first movers are going to be the ones that are more sophisticated in nature," John Palmer, head of derivatives at Kraken, said in an interview. "So they're either already connected to exchanges and trading themselves in a proprietary manner."
The comments come as the U.S. derivatives market prepares for the arrival of regulated "true" perpetual futures, a product that has long dominated offshore crypto trading venues such as Hyperliquid (HYPE). Perpetual futures, or perps, allow traders to maintain leveraged positions without an expiration date, unlike traditional futures contracts that must eventually be rolled into a new contract.
Globally, perpetual futures account for the vast majority of crypto derivatives volume, yet U.S. traders have historically had limited access due to regulatory restrictions.
Prediction market platform Kalshi, which launched U.S. perpetual futures last week, said on Wednesday that it already crossed $1 billion in trading volume.
Palmer argued that one reason perpetual futures became so successful outside the U.S. is their simplicity. Unlike dated futures, which require traders to manage expirations and contract rolls, perps allow positions to remain open indefinitely.
I think it's a simple derivative structure compared to some of the nuances of dealing with dated futures," he said. "If I buy a June [future], then it expires, and if I want to keep my position on, I have to roll it."
Kraken believes removing those complexities — and eventually allowing crypto assets to be used as collateral — could help bring U.S. traders closer to the experience available in international markets, he said.
For now, the company sees the launch of regulated perps as just the beginning. Despite crypto derivatives generating trillions of dollars in annual volume globally, Palmer said the U.S. market remains in its early stages.
We're at the beginning of the game," he said. "We're at the national anthem still."