Crypto News

Coinbase launches first publicly traded crypto derivatives product

Coinbase Derivatives Exchange, formerly FairX, is ready to launch its first listed crypto derivatives product – Nano Bitcoin Futures (BIT).

BIT futures on the Coinbase futures exchange

According to the official announcement, BIT will be available for retail investors to trade on the CFTC-regulated futures exchange starting June 27. Boris Ilyevsky, head of the Coinbase Derivatives Exchange, announced that each BIT futures contract will represent 1/100th of a bitcoin.

Initially, the derivatives product will be available for trading through multiple brokerages including retail brokerages EdgeClear, Ironbeam, NinjaTrader, Optimus Futures, Stage 5 and Tradovate. Retail players can also access it through clearing firms ABN AMRO, ADMIS, Advantage Futures, ED&F Man, Ironbeam and Wedbush.

Coinbase is currently awaiting regulatory approval of its own Futures Commission Merchant (FCM) license to offer margin futures contracts directly to its customers.

Boris Ilyevsky, Head of the Coinbase Derivatives Exchange, explained:

“It is more important than ever to bring the benefits of futures to a broader market so that all types of traders have access to the regulated crypto derivatives markets in the US to voice their opinion or to hedge their underlying crypto assets .”

Futures have become a popular product among traders for a number of reasons, including non-stop, reduced upfront investment, leverage, and the ease of going long and short.

Ilyevsky said the small BIT futures contract will also require less upfront capital than traditional futures products and is designed specifically for retail traders. The executive added that BIT has the potential to create a real opportunity for significant expansion of retail participation in US-regulated crypto futures markets.

The move comes just weeks after Coinbase announced it would lay off 18% of its workforce amid deteriorating macroeconomic conditions.

Coinbase’s FairX acquisition

Coinbase first entered the derivatives space after buying a US-based derivatives platform FairX earlier this year, which was already registered with US regulators. It was later renamed the Coinbase Derivatives Exchange.

While US-based companies like Kraken and CME Group also offer these services, many platforms have been reluctant to delve deeper into derivatives due to regulatory concerns. On the other hand, Binance and OKEx account for the lion’s share of derivatives supply outside the US.

Coinbase’s FairX deal follows FTX US’ August 2021 acquisition of crypto derivatives exchange LedgerX.

Source: Crypto News Deutsch

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