Bybit’s TradFi Perpetuals and the Race to Absorb Traditional Finance Volume
Bybit’s launch of 24/7 perpetual contracts on U.S. stocks and global ETFs on May 8 is the latest sign that large cryptocurrency exchanges are no longer content to serve only cryptocurrency traders. The product, which lets users take leveraged long or short positions on equity prices without owning shares and without being bound by market hours, puts Bybit in direct competition with offshore brokerages and fills a gap that traditional stock exchanges leave open on weekends and holidays.
The exchange joins a small but growing list of platforms attempting to fold equity exposure into the cryptocurrency trading experience, reversing the usual direction of product convergence.
The Mechanics of Cross-Asset Perpetuals
Perpetual contracts are derivatives with no expiration date that settle continuously based on the difference between a trader’s entry price and the mark price of the underlying asset. Traders on Bybit’s platform post cryptocurrency as margin, take a position referenced to a real-time equity price feed, and hold that position indefinitely.
Funding rates, periodic payments exchanged between long and short holders based on whether the contract price drifts above or below the spot reference price, keep the contract anchored to the underlying asset’s fair value.
The unusual element in Bybit’s product is the price feed itself. U.S. stock exchanges close at 4 p.m.
Eastern time. Global ETFs track baskets of assets that also trade during specific hours.
Bybit’s perpetuals trade around the clock, meaning the price feed during off-hours must be synthesized from futures markets, index proxies, or third-party data providers. The accuracy of that feed, and the risk of price gaps when equity markets reopen, is a key structural question the exchange has not fully addressed in its public disclosure.
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The Broader Arms Race
Interactive Brokers (IBKR) moved in the opposite direction in May 2026, expanding its cryptocurrency futures offerings through a partnership with Coinbase Derivatives.
That deal added crypto-native futures to a traditional brokerage platform. Bybit’s move adds traditional-asset derivatives to a crypto-native exchange.
Both are converging toward the same hybrid product, just from different starting points.
Coinbase (COIN) has taken a different approach, focusing on its role as a regulated U.S. exchange and custodian rather than expanding into unregulated equity derivatives. Its Q1 2026 earnings showed a net loss of $394 million and a 31% year-over-year revenue decline, pressuring the exchange to find new product revenue streams.
Equity-linked derivatives remain off the table for Coinbase under current SEC and CFTC frameworks.
OKX and Bitget have each signaled intent to launch similar TradFi perpetual products. A race among offshore exchanges to cover the same equity names could compress funding rates and reduce profitability for all of them simultaneously.
How We Got Here
The synthetic stock product category traces back to the 2021 bull market.
Several platforms, including FTX and Binance, launched tokenized equity products that let users buy fractions of Apple or Tesla shares on blockchain rails. Both pulled those products after SEC and CFTC pressure.
FTX’s synthetic equities desk was shut down as part of its broader collapse in late 2022. Binance delisted its stock tokens in mid-2021 following regulatory inquiries from German and British financial watchdogs.
Bybit’s perpetuals product is structurally different from tokenized equities.
It does not create a token representing share ownership. It creates a derivative priced against share value.
That distinction may matter for regulatory classification, but it does not resolve the underlying jurisdictional question of whether a crypto-margined derivative on a U.S. equity falls under CFTC oversight, SEC jurisdiction, or neither when offered by an offshore exchange to non-U.S. persons.
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Outlook
The product’s near-term audience is traders in jurisdictions outside the U.S. with appetite for leveraged equity exposure on a 24/7 schedule. The longer-term question is whether regulatory developments, particularly the U.S.
Clarity Act or a CFTC rulemaking on crypto derivatives, open the door for American traders. If U.S. market structure legislation passes in a form that treats crypto-margined derivatives on equities as CFTC-regulated products, Bybit and its competitors would need to register with the CFTC or exit the U.S. market entirely.
Neither outcome is imminent. The more likely near-term development is that one of Bybit’s offshore competitors launches a similar product, forcing a funding-rate war that tests whether the audience for equity perpetuals is large enough to support multiple providers at once.
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