Kraken, a leading cryptocurrency exchange, has broadened its trading offerings by launching perpetual futures contracts for major forex currency pairs. This move introduces 24/7 trading access to EUR/USD and GBP/USD directly within its platform, marking a significant step in its evolution toward a comprehensive multi-asset trading venue.
The newly launched FX perpetual contracts, or "FX perps," are now available on Kraken Pro. They function similarly to the exchange's existing crypto perpetual contracts but are focused on traditional fiat currencies. Unlike standard forex futures that have expiration dates, these perpetual contracts trade continuously without settling, providing constant market exposure.
This development allows traders to manage both cryptocurrency and traditional forex positions from a single, unified interface. It eliminates the need to use multiple platforms, streamlining the trading experience for active market participants.
How FX Perpetual Contracts Work on Kraken
The FX perpetual contracts on Kraken are designed to mirror the price movements of the underlying spot forex market. Pricing updates every second while the relevant forex markets are open. To ensure reliability, the contracts are benchmarked against DxFeed’s Composite Forex Index.
To maintain market integrity, especially during periods when traditional forex markets are closed, Kraken has implemented several protective mechanisms. These include:
- Zero funding payouts during market closures.
- Order price collars that restrict trading to within a 4% range of the last available index price.
These features are intended to reduce volatility and protect traders from extreme price movements during off-hours.
The contracts also support leverage of up to 20x, aligning with the leverage offered on Kraken's crypto perpetual products. For existing users of Kraken Pro, the trading interface remains unchanged, making the transition between asset classes seamless and requiring no additional learning curve.
Driving Force Behind the Expansion
The introduction of forex perpetuals is a strategic response to demonstrated user demand. Kraken reported substantial forex spot trading volume on its platform in 2024, totaling $5.4 billion. Notably, the EUR/USD and GBP/USD pairs alone accounted for $3.5 billion of that volume.
This new product aims to cater to the same cohort of high-volume traders by offering a more sophisticated tool for managing fiat currency exposure. It effectively lowers the barriers to accessing round-the-clock forex markets, a key advantage for global traders operating in different time zones. Explore more advanced trading strategies to enhance your market approach.
Kraken's Multi-Asset Strategy
The launch of forex perpetual contracts is not an isolated event but part of Kraken's broader ambition to become a full-spectrum financial services provider. This strategy involves a deliberate push into traditional markets, complementing its established crypto offerings.
Earlier in the year, Kraken rolled out commission-free trading for U.S. stocks and ETFs, bringing thousands of equity products into its ecosystem. The exchange has also formed partnerships with major financial entities, such as a collaboration with Mastercard that enables users in Europe and the UK to spend their cryptocurrency assets at millions of merchants globally.
By integrating forex, stocks, and cryptocurrencies, Kraken is positioning itself as a one-stop shop for traders who prefer a consolidated portfolio management experience. This approach taps into the growing demand for platforms that can handle diverse asset classes without forcing users to fragment their capital across different services.
Frequently Asked Questions
What are forex perpetual contracts?
Forex perpetual contracts are derivative instruments that allow traders to speculate on the price movements of currency pairs without an expiration date. They are similar to perpetual swaps found in crypto markets and trade continuously, using a funding mechanism to keep their price anchored to the underlying spot market.
How do Kraken's FX perps differ from traditional forex trading?
Traditional forex trading often occurs through brokers with specific market hours, typically following the sun across major financial centers. Kraken's FX perps offer 24/7 trading, higher leverage options (up to 20x), and are integrated into a platform that also supports cryptocurrencies and stocks, providing a unified trading experience.
What are the benefits of trading forex on a crypto exchange like Kraken?
The primary benefits include the ability to manage a diversified portfolio of crypto and traditional assets from a single account, access to 24/7 markets, and a familiar trading interface for users already versed in crypto derivatives. It offers convenience and continuity for multi-asset traders.
What risk management features are in place?
Kraken has implemented several features to protect traders, including order price collars that limit trades to a 4% range from the last index price during forex market closures and zero funding payouts in those same periods to prevent excessive costs.
Who is the target audience for this new product?
This product is designed for active traders already using Kraken who wish to expand their trading to include major forex pairs without leaving the platform. It is particularly appealing to those who trade both crypto and traditional markets and value the efficiency of a single account.
Does this require a new account or separate onboarding?
No. Existing Kraken Pro users can immediately access the new FX perpetual contracts through their current account and interface. The trading experience is consistent with other perpetual markets on the platform, requiring no additional setup.