Kalshi has received approval from the CFTC to launch gold and silver perpetual futures on Thursday, becoming the first non-cryptocurrency perpetual futures product approved in the United States. Since launching cryptocurrency perpetual futures in May, the nominal trading volume of related contracts has reached $44 billion. Traditional exchanges like CME Group are under pressure, and CME has even sued the CFTC in an attempt to stop the expansion of such products. Kalshi is also applying for perpetual futures linked to U.S. stocks, copper, and foreign exchange.

Written by: Long Yue, Wall Street Insights

The prediction market platform Kalshi is extending its reach from cryptocurrencies to precious metals, increasing pressure on traditional futures exchanges.

According to CNBC's report on September 10, Kalshi has received approval from the U.S. Commodity Futures Trading Commission (CFTC) to officially launch gold and silver perpetual futures contracts on Thursday. This is the platform's first approved non-cryptocurrency perpetual futures product following cryptocurrencies.

The relevant application was initially submitted in July, and the CFTC completed the approval process this week.

The Chief Risk Officer of Kalshi clearinghouse Kalshi Klear, Udesh Jha, stated that the choice of precious metals as the next perpetual futures target stems from strong market demand for such assets. "Metals, especially gold and silver, tell a story because of inflation," he said.

Perpetual futures ("perps") are a type of futures-style contract without an expiration date, allowing investors not to hold the underlying asset itself. The contracts remain anchored to market prices through a funding rate mechanism. This product form has long been active in overseas unregulated cryptocurrency exchanges, and Kalshi is introducing it to the regulated U.S. market, marking the first attempt for this product to be compliant in the U.S.

Cryptocurrency Preview, Precious Metals Follow

Kalshi was first approved in late May to launch cryptocurrency perpetual futures, bringing this asset class, which previously had a trading volume of up to $90 trillion, into the regulated U.S. market for the first time.

So far, the nominal trading volume of cryptocurrency perpetual futures contracts has reached a cumulative $44 billion.

The demand for precious metals is also supported by data. The commodity event contracts covering metals and oil under Kalshi have surpassed $400 million in trading volume within 7 months—whereas it took cryptocurrency event contracts 14 months to reach the same milestone, which is twice the time taken by precious metals.

Traditional Exchanges Under Pressure, CME Sues CFTC

The advancement of perpetual futures has directly impacted the existing dynamics of traditional futures exchanges.

Since the launch of Kalshi's perpetual futures, the stock prices of CBOE and CME Group have both fallen, with the market worried that this new type of contract will erode the business model of traditional exchanges.

CME has gone a step further, filing a lawsuit against the CFTC, claiming improper procedures in the approval of perpetual futures, attempting to use legal means to stop the expansion of such products in the United States.

In response, Udesh Jha attributed Kalshi's competitive advantage to its compliance attributes. "Ultimately, it comes down to being a regulated platform," he said, "doing things the right way, with sound risk control… unregulated platforms will always hit a ceiling."

Beyond gold and silver, Kalshi has also applied in August to launch perpetual futures contracts linked to U.S. stocks, the industrial metal copper, and foreign exchange, currently awaiting approval from the CFTC.