CME faces competitive threat from onshore perps
The guest disputed criticisms from CME's CEO, arguing that Kalshi's regulated perpetual futures employ robust risk models comparable to legacy exchanges while offering lower leverage than some traditional futures.
The argument
CME CEO Terry Duffy criticized crypto perps as a 'disaster waiting to happen' due to leverage and automatic liquidations. Wang countered that Kalshi's CFTC-approved risk engine, clearing house structure, and guarantee fund provide adequate safeguards, positioning the platform to compete with traditional derivatives venues.
The thesis, stress-tested
✓ What validates it
- ✓CME launching its own perpetual-style products to compete
- ✓Significant institutional volume migration from traditional futures to onshore perps
▸ Risks discussed
- ▸Systemic risk from rapid liquidations during market crashes
- ▸Potential loss of market share for legacy exchanges if volume migrates to perps
Hear it yourself
"also run on the same infrastructure. And is it, like, volume weighted? It's or is it just truly an average, or how does that work? Yeah. It's it's honestly there's, like, there's there's actually, like, a 30 page methodology document on it. So there's, like, a lot of nuances to it. For, for, it we we just take the the price as it comes in through that that feed. For pretty few markets, we take a sixty second, time weighted average. Okay. So Arthur Hayes was on the show recently, and he was talking about how the metric to track when it comes to perps is trading volume versus open interest."
11:15
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE