Crypto futures hit 12-month low as CFTC clears path for perps

Total futures trading across major crypto exchanges fell to about $2.9 trillion in May, the weakest monthly figure since late 2023 and well below last year’s monthly peaks of roughly $6 trillion to $7 trillion. Spot trading volumes and on-chain activity were also subdued heading into June.

Trading remained concentrated among a small number of platforms. Binance held the largest share of futures volume, followed by OKX, Bybit and Gate. Smaller venues recorded the steepest declines as trading consolidated onto exchanges with deeper liquidity.

In May, the Commodity Futures Trading Commission moved to permit perpetual futures contracts to be listed by U.S. exchanges. Perpetual futures differ from traditional futures because they have no expiration date. Instead of expiring, these contracts use periodic funding-rate payments between long and short holders to keep contract prices close to spot-market prices.

Funding rates function as a running measure of leverage and market sentiment, and perpetual contracts are generally more capital efficient than trading on margin. Those features have made perpetuals the most used derivatives format in global crypto markets.

Many U.S.-based retail traders have accessed perpetual markets through offshore venues and virtual private networks. The new regulatory path allows domestic exchanges to list perpetual contracts under U.S. oversight.

Market participants identify several operational factors that will affect where futures volume flows, including margin and fee structures, the design of funding-rate mechanics and order-book depth. Whether U.S. venues match the trading conditions offered by established offshore exchanges will influence future volume distribution.