Kraken is getting ready to launch regulated perpetual futures in the US through Bitnomial. This could bring one of the biggest crypto derivatives products to the domestic market.
Frequently Asked Questions
Here is a list of FAQs about Krakens upcoming CFTCregulated perpetual futures for US traders
BeginnerLevel Questions
1 What exactly is a perpetual future
Its a type of crypto contract that lets you bet on the price of Bitcoin going up or down without ever having to settle or expire You can hold it as long as you want as long as you have enough funds to cover the position
2 How is this different from regular futures I can trade now
Regular futures have an expiration date Perpetuals dont expirethey run forever This makes them more like trading the spot price but with leverage
3 Is this legal for US traders
Yes Kraken is launching this specifically under CFTC regulation This means its a regulated legal product for US residents unlike many offshore crypto exchanges that are blocked for US users
4 Do I need to be a professional or institution to trade these
No Kraken is expected to offer this to retail traders as well as long as you pass the standard verification and suitability checks for futures trading
5 Whats the funding rate I keep hearing about
Its a small periodic fee paid between traders to keep the perpetual contract price close to the actual market price If the contract is higher than spot longs pay shorts If its lower shorts pay longs
AdvancedLevel Questions
6 How does CFTC regulation change the trading experience compared to unregulated exchanges
Youll likely have stricter KYCAML checks mandatory risk disclosures and position limits You also get the benefit of segregated customer funds and a legal framework if something goes wrong No more worrying about exchange insolvency
7 Will I be able to use high leverage like 100x or 125x
Probably not CFTCregulated products for retail typically cap leverage much loweroften around 2x to 10x for crypto Kraken will likely comply with these limits to stay within regulatory guidelines
8 How does this affect my taxes
In the US perpetual futures are treated as Section 1256 contracts by the IRS This means 60 of gains are taxed at the longterm capital gains rate and 40 at the shortterm rate