Coinbase Institutional is preparing to launch Bitcoin and Ethereum futures contracts. However, the new offerings will only be available to institutions and not retail markets.
On June 2, COINBASE announced that its derivatives exchange would launch BTC and ETH futures contracts on June 5.
The futures exchange has been fully regulated by the Commodities Futures Trading Commission (CFTC).
Coinbase Derivatives Offerings
The futures contracts will be sized at 1 and 10 . These institutional-sized contracts allow clients to “manage exposure with unparalleled accuracy,” the firm
Coinbase added that it would be offering “significantly lower fees” but did not specify what they were. The spot trading exchange has some of the highest transaction fees in the industry, driving the lion’s share of company profits.
Futures contracts are agreements to buy or sell crypto assets at a predetermined price for delivery at a specified time in the future. The firm noted:
“With a monthly expiry, USD settlement, and accessible through major institutional FCMs and brokers, these contracts are designed to integrate into other trading strategies seamlessly.”
Earlier this month, the firm introduced its new derivatives exchange, “Coinbase International Exchange.”
The offshore exchange was launched following the approval of an operating license for Bermuda. It is the company’s latest move to distance itself from the hostile environment at home in the United States.
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This week, the CFTC sent out an advisory stating that it is putting a special focus on emerging risks in crypto. Commissioner Kristin Johnson said “We observe increased registration activity for crypto-commodity derivatives clearing and note that several proposed models adopt a non-intermediated market structure,” before adding:
“Unless we introduce parallel regulation, these crypto-commodity derivatives clearing models may not be subject to the most rigorous regulatory standards.”
Coinbase is currently battling with the Securities and Exchange Commission, which has threatened it with legal action. The firm is seeking clarity on crypto regulations but getting nowhere with the regulator, which has rebuked its requests
According to Deribit, the total 24-hour volume for BTC futures is $292.4 million or 10,802 BTC. Additionally, futures open interest (OI) on June 1 was $249.8 million.
Coinbase stock (COIN) is up 2.2% on the day to trade at $62.12 after hours, according to MarketWatch data. COIN has had a solid year gaining 88% since Jan. 1 despite the regulatory oppression in the U.S.
However, share prices have tumbled 82% since their all-time high during the November 2021 crypto market peak.
