Introduction to Kraken Perps

Kraken has integrated perpetual futures trading directly into its flagship app, aiming to translate a complex, high-risk instrument into an accessible tool for its vast retail user base, not just professional traders.

Launch of Kraken Perps

In an announcement on September 11, crypto exchange Kraken said it had officially launched “Kraken Perps,” a perpetual futures trading product now available to eligible clients in select regions worldwide.

Market Context

The launch, which initially supports USD as collateral, marks the exchange’s strategic foray into a derivatives market that recently saw a record monthly volume exceeding $515 billion in August.

How Kraken Perps Work

According to the announcement, users will fund their positions using assets from their existing Kraken balance as collateral, with USD the primary supported currency at launch.

Streamlined Trading Process

To initiate a trade, a user simply selects an asset, chooses “Increase” to go long or “Decrease” to go short based on their price prediction, and decides on the position size. This streamlined process is central to Kraken’s thesis of making a powerful tool feel approachable.

Use Cases for Kraken Perps

The Kraken team provided a concrete use case to illustrate the product’s utility. If a trader believes the Bitcoin price is undervalued, they can open a long perpetual contract position instead of purchasing BTC outright on the spot market.

Benefits of Perpetual Contracts

This allows the trader to gain exposure to potential price appreciation without tying up the full capital required to own the asset. Conversely, a trader with a bearish outlook on a token can open a short position to potentially profit from a price decline, a strategy often used for hedging existing spot holdings.

Risk Management

Risk management is a core focus of Kraken Perps. Per the announcement, the platform includes built-in safeguards such as customizable stop-loss orders, which automatically limit losses if the market moves against a trader’s position.

Conclusion

With the launch of Kraken Perps, Kraken is making a significant move into the derivatives market, providing its users with a powerful tool for trading perpetual futures. For the latest news and updates on Kraken and other crypto exchanges, visit bitpulse.