The CFTC has sparked a potential revolution on Wall Street. Exchange stocks are dropping

Shares of exchange stocks are tumbling after the regulatory approval of perpetual futures for bitcoin ignited concerns that a new wave of trading products could be coming for Wall Street.

CME Group, known for its derivatives and futures trading platforms, dropped more than 3% in Tuesday’s session and is down around 9% the last two days. Cboe Global Markets, an exchange and derivatives network, plunged 8% in Tuesday trading, bringing its losses for this week to above 17%.

New York Stock Exchange parent Intercontinental Exchange slid more than 3% on Tuesday and is down more than 5% for the week. Nasdaq shares tumbled more than 5% in the session, dragging the stock into the red compared with the start of the week.

The Commodity Futures Trading Commission last week approved perpetual futures — a type of future-style contract with no expiration date known as “perps” — for bitcoin trading on Kalshi. Investors are worried that the CFTC could give the green light to other asset classes to trade via perpetual futures next, which could increase competition for the traditional exchanges that have long dominated on Wall Street.

The “concern is that perps could come to equity products, and potentially displace CME/CBOE S&P products,” Barclays analyst Ben Budish told clients in a Tuesday note.

Budish said perpetual futures could challenges certain products targeting retail investors. But despite the recent stock pullback, Budish said there’s already comparable offerings in the U.S. that haven’t meaningfully changed how retail investors trade.