Bitcoin Perpetual Futures Are Now Available for Trading. Here's What You Need to Know.

Some platforms now offer the ability to trade perpetual futures contracts for Bitcoin.

However, they're bringing new liquidity into the crypto sector, which is bullish.

For years, crypto's most-used financial derivative was one that American investors technically couldn't access while complying with the law. That changed on May 29, when the Commodity Futures Trading Commission (CFTC), the federal derivatives regulator, cleared the first onshore Bitcoin (CRYPTO: BTC) perpetual futures contract.

Now, all sorts of different platforms are going to start offering perpetuals to their users. The prediction market Kalshi switched on Bitcoin perpetuals in early June, and Polymarket is preparing a rival product.

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But something can be legal and popular without being suitable for everyone. So before you try dabbling in perpetual futures, let's learn how "perps" work and why there's more than one way they can make money for a savvy investor.

Picture a plain futures contract that expires ; it's a deal to buy or sell something at a set price on a set date. Perpetuals delete the date, so a position can run indefinitely as long as you keep collateral posted, and they also allow leverage.

The idea predates crypto. The illustrious economist Robert Shiller floated it in the early 1990s as a tool for hard-to-price assets like houses, and the BitMEX crypto exchange started offering them for Bitcoin in 2016. Perps are now offered for everything from crypto and stocks to oil, silver, and even chip prices.