Following the approval by U.S. regulators for Bitcoin perpetual contracts on regulated platforms, Wall Street exchanges quickly came under pressure. The market is concerned that if these contracts without expiration dates expand to more assets, traditional exchanges' long-standing dominance in derivatives trading could face more direct competition.

Stock prices on the exchange fell

On Tuesday, CME Group fell more than 3%, bringing its cumulative decline over the past two trading days to about 9%. Cboe Global Markets fell about 8% on the day, with a cumulative decline of more than 17% this week.

Investors are not only focused on Bitcoin itself, but also on whether regulators will continue to broaden the scope of similar products. Once perpetual contracts are introduced into more asset classes, existing exchanges' core product lines may be diverted.

CFTC approves Kalshi's launch

The U.S. Commodity Futures Trading Commission (CFTC) approved Kalshi last week to offer Bitcoin perpetual futures. Perpetual contracts, often called perps, are characterized by having no fixed expiration date; these types of products have been more common in the crypto market previously.

This approval is seen by the market as a new signal. Investors worry that if regulators subsequently allow other assets to be traded in perpetual contracts, the advantage that traditional exchanges have built around standardized derivatives could be undermined.

Stock index products become a focus of attention

In a report to clients on Tuesday, Barclays analyst Ben Budish stated that the market's core concern is that perpetual contracts may expand into equity-related products in the future, putting substitution pressure on CME and Cboe's S&P-related products.

However, he also believes that this competitive risk remains manageable because there are still differences between different products, and established exchanges such as Cboe and CME still possess structural advantages. The short-term stock price decline largely reflects the market's repricing of the regulatory spillover effects.