CME Group Finds Institutional Demand Drives Hedging Focus, Dismissing Perpetuals in Q2 2026

How CME assessed demand signals for perpetual futures and what objections institutions raised

1) How CME said it measured/interpreted demand signals across asset classes (perpetual vs. hedging futures)

A. It leaned heavily on institutional participation as the core “demand signal”

CME’s executives framed perpetual futures as outside the needs of their dominant customer base, emphasizing that 94% of volume in the first half of 2026 originated from institutional customers.¹ Based on this, management interpreted institutional engagement (not just industry headlines) as the key metric for whether perpetuals would fit CME’s role as a risk-management venue.²

B. It used market behavior proxies such as open interest and participation growth—then argued those metrics show “real” risk management demand elsewhere

On the crypto side, CME pointed to growth in its futures complex and compared those outcomes to a specific crypto perp product introduction:

• CME said it trades $4.5B–$6.5B per day in its cryptocurrency complex versus ~$270M/day for the Bitcoin perp introduced by Kalshi.³
• CME said its average daily open interest in June/July was $9B–$10B, versus $10M open interest for that Kalshi perp product introduced end of May/beginning of June.³

CME’s interpretation: despite perpetuals existing in crypto, CME’s futures demand still grew (it stated crypto perpetuals “are not new” and existed before CME’s crypto futures complex launched in 2017, and it said its crypto futures volume is up over sevenfold in the past three years).⁴

C. It claimed it “has not heard demand” for perpetual-style products from customers (across at least crypto, and by implication more broadly)

CME explicitly stated: “we have not heard demand from our customers for these products.”⁴ It further argued that CME’s futures filled a market need “not met by traditional crypto products, including perpetuals.”⁴

D. It treated “demand” in institutional terms: products must provide hedging features like price/time certainty and workable risk tools

CME’s management argued that the type of demand that matters for institutional users is functional hedging:

• CME said perpetuals do not provide price or time certainty, two necessary components for hedging exposures.¹
• It described perpetuals as “highly engineered” leverage/spot-like instruments relying on frequent funding rate adjustments that “revert the position back to the spot price,” and said they are characterized by high leverage and automated liquidations.¹

Management then concluded that perpetuals “do not appeal to our core customers” and are “in no way substitutes for the institutional hedging tools that these customers rely on.”¹

E. It addressed the “signal” argument by describing retailer interest as structurally different from institutional hedging use-cases

CME acknowledged perpetuals may appeal to some retail traders seeking high leverage,¹ but interpreted this as not a relevant signal for CME’s institutional-driven franchise—especially because retail-focused products come with “limited investor protections” and “heightened market risk,” particularly for retail participants.¹

2) What specific objections institutions raised about risk management, cost, and protections

CME management gave detailed objections—some direct (institutions “do not want this product”) and others framed as structural shortcomings of perpetuals.

A. Risk management objections: lack of appropriate hedging mechanics and operational fit

CME said institutions in energy/commercial derivatives explicitly reject perpetual risk structures:

• CME cited conversations where an institution CEO and derivatives participants “reassured” CME 19 times that they “do not want this product” because they “do not know how they would possibly risk manage the exposures that they have on their books on it with a perpetual contract.”²
• CME generalized the issue: perpetual-style products “trade around a leveraged spot price” and CME argued “does absolutely nothing for them in order to risk manage their product” when the cash-market side has end dates.²

Separately, CME argued perpetuals miss key hedging requirements for institutions:

• No price or time certainty undermines hedging exposure management.¹
• Perpetuals use a funding rate adjustment mechanism and feature automated liquidations, which CME said introduces market risk.¹

B. Cost objections: perpetual total trading cost (fees + funding) is materially higher

CME claimed that, when considering both trading economics:

• “the total cost to trade perpetual futures is typically orders of magnitude more expensive than our highly efficient futures contracts,” because of transaction fee plus daily funding cost.¹

It also made a cost-comparison specific point on crypto perp structures:

• CME said funding-rate and auto-liquidation risk-modeling were not widely discussed in the market debate, and then stated that if retail rolled rather than let expirations resolve, the roll cost versus paying the funding rate and product trading cost would be far higher—specifically calling out that the cost to trade was sevenfold higher than CME’s execution cost and that this would “way overshadow” roll costs.⁵

C. Protections objections: limited protections and heightened risk from perpetual mechanics

CME stated perpetuals provide:

• “limited investor protections”¹
• “heightened market risk, particularly for retail participants” with high leverage and automated liquidations.¹

D. Structural/market integrity objections: confusion about the mechanism and systemic risks in equities

CME raised a regulatory/market-structure concern tied to design complexity and understanding:

• CME said that for equity perps “as designed today and listed today in crypto,” it could be a systemic issue because “no one understands full well how that funding rate would work and how it would be calculated,” and because CME described the products as technically not a future, but a spot leverage product.⁶

E. Institutional “fit” objections: perpetuals are not substitutes for how institutions manage derivatives exposure

CME explicitly framed the objections as a mismatch with institutional risk transfer:

• Perpetuals “are in no way substitutes for the institutional hedging tools” institutions rely on.¹
• CME emphasized that their customers need “tools” to manage and mitigate risk, and CME argued its listed futures align better with those needs.⁷

3) Asset-class differences in CME’s narrative

Crypto

CME acknowledged perpetuals are part of the broader crypto-native ecosystem but argued CME’s measured demand signals show institutional and overall market risk management still favors CME futures:

• CME said it has grown crypto futures volume over sevenfold in three years despite perpetuals existing.⁴
• It cited large daily trading and open interest figures for CME’s crypto futures complex versus a crypto perp example product.³
• It asserted it has not heard customer demand for perpetuals.⁴

Energy and “other asset classes” where commercial end-users hedge

CME’s strongest institutional objection narrative came from energy/commerce-related conversations:

• The institution rejected perpetuals due to inability to risk manage exposures using a perpetual contract.²
• CME then generalized that when cash markets have end dates, perpetuals tied to a leveraged spot proxy do not solve institutional hedging problems.²

Equities/indices (S&P-type “equity perps”)

CME emphasized systemic and transparency concerns and reiterated the institutional/protection mismatch:

• It argued any equity perp design “as in crypto” could cause systemic issues due to misunderstanding of funding-rate calculation and the spot-leverage nature of the instrument.⁶
• It also noted that perpetuals do not provide the price/time certainty needed for hedging.¹

Bottom line

CME said it measured demand mainly through institutional participation and customer-confirmed use-cases, and it argued that market proxies (open interest and trading volumes in its futures complex) show stronger risk-management demand than perpetuals provide—especially in crypto.¹³⁴ It interpreted persistent perpetual headlines as insufficient evidence because institutional customers reject perpetual risk management mechanics, citing lack of hedging fit (no price/time certainty; funding-rate/auto-liquidation structure), materially higher total costs (fees + funding; “orders of magnitude” and “sevenfold” execution-cost comparisons), and limited protections plus systemic-risk concerns in equities.¹⁵⁶²