What Are Perpetual Futures? Perps Explained for US Traders

Perpetual futures were the biggest product in crypto trading for years, and for all of those years they were off-limits to US traders. That changed in 2026 when Kalshi, the CFTC-regulated prediction market exchange, launched the first regulated perps in America. If you trade event contracts and keep seeing "perps" in your feed, this guide covers what they are, how funding rates work, and why a prediction market exchange is the company that brought them onshore.

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What Are Perpetual Futures?

A perpetual future (a "perp" for short, sometimes called a perpetual swap) is a futures contract with no expiration date. A traditional future obligates you to buy or sell an asset at a set price on a set date. A perp drops the date entirely: the contract simply tracks the price of the underlying asset, and you can hold your position for an hour or a year.

That raises an obvious question. If the contract never settles, what stops its price from drifting away from the real asset? The answer is the funding rate.

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How Funding Rates Work

The funding rate is a small periodic payment exchanged between traders on opposite sides of the market:

• When the perp trades above the spot price, longs pay shorts. Holding a long position costs money, which nudges traders to sell and pushes the perp back down toward spot.
• When the perp trades below the spot price, shorts pay longs, and the same logic works in reverse.

On Kalshi, funding is charged every eight hours and shows up in your transaction history. Individual payments are usually a fraction of a percent, but they compound: a position held for weeks in a strongly one-sided market can pay meaningful carry. Funding is also a sentiment signal in its own right. Persistently high positive funding means longs are crowded and paying up to stay in the trade.

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What Does "Perps" Mean in Trading Slang?

"Perps" is just shorthand for perpetual futures. You will also see "perpetual swaps" (the original name from offshore crypto exchanges) and ticker-style names like BTCPERP. They all refer to the same instrument: a non-expiring, usually leveraged contract on the price of an asset.

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Kalshi Perps: The First Regulated Perpetuals in America

Perps were invented for offshore crypto exchanges, and the volume they built there is staggering. Kalshi cited annual offshore perp volume growing from roughly $28 trillion in 2023 to more than $90 trillion in 2025, all of it out of reach of US customers.

In late May 2026 the CFTC approved Kalshi's bitcoin perpetual contract, and trading went live in early June. The launch numbers were extreme even by Kalshi standards:

• More than $1 billion in volume within the first week
• A waitlist of over 1 million traders before launch
• The fastest-growing product in the company's history

Kalshi is not stopping at bitcoin. The company has filed to offer perps on more than a dozen cryptocurrencies, sought approval for precious metals perps in July 2026, and filed in August 2026 to launch perps tied to equity indexes, a direct move onto the turf of traditional futures exchanges. There is an open regulatory debate about whether these contracts are technically futures or swaps, but for traders the practical takeaway is simpler: perps now exist inside a CFTC-regulated exchange with US customer protections.

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Perps vs Prediction Markets: Different Tools for Different Views

It might seem odd that a prediction market exchange launched perps, but the two products complement each other well:

	Event contract	Perpetual future
Question	Will X happen by date Y?	Where is the price going?
Payoff	Settles at $1 or $0	Continuous, marked to price
Expiry	Fixed resolution date	None
Leverage	None (max loss is your stake)	Typically leveraged
Cost of holding	None	Funding every 8 hours

If you think bitcoin finishes the year above $100,000, an event contract expresses exactly that view with strictly capped risk. If you think bitcoin rips 10% this month and want amplified exposure to the move itself, a perp is the sharper tool. Many traders use both: markets on Prediction HuntPrediction.com show the probability landscape, and perps express the directional leg.

For a refresher on how event contract pricing works, see our guide to prediction market probabilities.

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The Risks: Leverage, Liquidation, and Funding Drag

Perps deserve respect. The three ways they hurt traders:

1. Leverage cuts both ways. A 10x levered position turns a 10% adverse move into a total loss.
2. Liquidation is mechanical. If your margin runs out, the exchange closes your position automatically, often near the worst price of the move.
3. Funding drag is silent. Paying funding every eight hours on a crowded trade eats returns even when the price goes nowhere.

Event contracts have none of these failure modes, which is why they remain the better instrument for beginners. Our guide on how to short prediction markets covers expressing bearish views without leverage.

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The Bottom Line

Perpetual futures are non-expiring, funding-balanced contracts that dominated offshore crypto trading for a decade and finally arrived in the US through Kalshi in mid-2026. They are a powerful tool for directional traders and a risky one for the unprepared. If you are new to this world, start with event contracts, learn how crypto prediction markets price the same assets, and treat perps as a graduate-level instrument.