The CFTC, which approved KalshiEX's BTCPERP contract in late May, a bitcoin perpetual treated as a futures contract, also indicated that similar products on other asset classes would be reviewed on a case-by-case basis. However, this clarification failed to reassure investors, who fear a gradual expansion of these contracts to indices, equities, or other underlying assets. This concern is amplified by KalshiEX's immediate success, surpassing $1bn in trading volume in its first week and reaching $5.5bn in just two weeks.

Since this decision, shares of Intercontinental Exchange and CME Group have lost approximately 20%, while Cboe has dropped by about 30%. The sell-off is particularly striking as it reflects a sharp compression in multiples. CME is now trading at around 18 times forward earnings, Cboe at 17 times, and ICE at 15 times, levels not seen in over a decade.

The feared risk is not so much an immediate loss of revenue, but rather a breach in the regulatory moat that protects the major derivatives exchanges. If perpetual futures were to expand beyond crypto-assets, they could compete with high-margin products, notably ultra-short-term options like 0DTEs, as well as certain futures contracts aimed at retail investors.

In the face of this threat, strategies among legacy players are diverging. Cboe is considering converting certain continuous bitcoin and ether contracts into perpetual futures to avoid ceding ground to new entrants. CME is taking the opposite approach, filing a lawsuit against the CFTC, arguing that these products should be classified as swaps and subjected to a stricter regulatory framework.