Exchange Stocks in Freefall After Perps Approval

The CFTC's approval of perpetual futures — known as "perps" — for bitcoin trading on Kalshi sent traditional exchange stocks tumbling.

CME Group dropped more than 3% Tuesday and is down roughly 9% over two days, according to CNBC. That's its worst weekly performance since 2020. Cboe Global Markets lost 8% Tuesday alone, pushing its weekly loss above 16% — also a five-year worst. Intercontinental Exchange, parent of the New York Stock Exchange, slid more than 3% Tuesday. Nasdaq shares fell more than 6%.

The fear, as Barclays analyst Ben Budish spelled out in a Tuesday client note, is straightforward: if perps can be approved for bitcoin, they can be approved for equities. That would directly threaten CME and Cboe's flagship S&P-linked products — their bread and butter.

RBC analyst Ashish Sabadra told clients the competitive risk is "manageable" because perpetual futures face structural differences from exchange-listed products and would likely hit leverage limits from clearing houses. But investors aren't waiting around to find out.

The Gemini Case Gets Dropped — and Selig Gets Specific

On the same Tuesday, CFTC Chairman Michael Selig went on CNBC's Squawk Box and said publicly what was already implicit in last week's court filing: the agency is moving to vacate the January 2025 order against Gemini, the crypto exchange run by Tyler and Cameron Winklevoss.

The original case — filed in 2022 — alleged Gemini made false or misleading statements to the CFTC in 2017 while seeking approval for a bitcoin futures product. The January 2025 order included a $5 million penalty and an injunction barring Gemini from making false statements to the agency. It was issued in the final weeks of the Biden administration.

Selig's exact words: "The Biden administration weaponized the federal agencies against the crypto industry and many other industries. They politically targeted people like the Winklevoss twins, and that's not acceptable. We're righting those wrongs."

Former CFTC chair Tim Massad called the move to vacate the order "very unusual." Vacating a settled enforcement order with a paid penalty is not standard procedure.

Tyler and Cameron Winklevoss were among the biggest individual crypto donors to Trump's 2024 campaign. The original case may have been overreaching, and the Trump administration may have a political interest in making it go away. Both propositions deserve examination. Selig himself won't discuss the case facts because litigation is ongoing, citing the ongoing litigation as a reason to avoid details.

White House Is Now in the Room on Prediction Market Rules

Also Tuesday, a filing showed the CFTC's proposal to regulate prediction markets like Kalshi and Polymarket is now under review by the Office of Management and Budget — meaning the White House has its hands directly on the rule-writing process.

President Trump posted on social media the same day: "It is critically important that the CFTC's exclusive authority over Prediction Markets is maintained, and that they will thrive." He also named Chris Christie, Letitia James, Tim Walz, and JB Pritzker as "SCUM" who should not be setting the rules.

Former CFTC and SEC chairman Gary Gensler pushed back, telling CNBC that despite the agency's claims, the CFTC is not authorized under the 2010 Dodd-Frank Act to regulate prediction markets. If Gensler is right, the entire regulatory framework being constructed could face a serious legal challenge.

CFTC Chairman Selig said back in January he planned to write formal rules for prediction markets after scrapping a proposed ban on sports and politics contracts. That rulemaking is now formally in the White House pipeline.

Polymarket Closes First Block Trade — Institutions Are Arriving

Meanwhile, Polymarket just completed its first institutional block trade — a six-figure transaction between FalconX, a digital asset brokerage, and Anera Labs, a trading technology startup. The contract was tied to the Ornn Compute Price Index, which tracks Nvidia H100 GPU chip rental pricing, according to CNBC.

Polymarket head of institutional liquidity Brooke Rizzetto called it proof that prediction markets are becoming serious institutional venues. This came roughly one month after rival Kalshi completed the first block trade on any prediction market.

Institutional block trades are how Wall Street actually moves money. This signals a shift from retail speculation on election outcomes to deeper market participation.

The Bigger Picture

These developments are part of a single trend, not separate stories.

The CFTC's enforcement actions dropped from 58 in one year to 13 in 2025 — a 78% collapse — according to reporting referenced in a Medium analysis by Earl Cotten in Newsarticulated. The agency dropped its own appeal against Kalshi. It's vacating Gemini's penalty. It's handing prediction markets a formal regulatory framework with White House backing.

The speed and scope of the rollback — combined with documented donor connections and direct presidential involvement — warrants scrutiny from multiple angles. That doesn't settle whether previous enforcement actions were justified. But the pattern is clear and moving quickly.

What This Means for Regular People

If you have money in a 401(k) holding exchange stocks — CME, Cboe, Nasdaq, ICE — you're already feeling this. The market is pricing in a real structural threat to their business models.

If you're a retail trader, perpetual futures and prediction market products could give you access to instruments previously reserved for institutional players overseas.

If you're a taxpayer, you're watching a federal regulatory agency get reshaped in real time by the administration in power. Whether the result will serve markets broadly or primarily benefit those who backed the right candidate remains an open question.