Coinbase Launches ‘Nano’ Bitcoin Futures Through Derivatives Exchange

Retail investors will be able to trade crypto futures through Coinbase starting Monday, as the largest exchange in the US by volume will offer them on its new derivatives exchange platform.

The move comes after Coinbase acquired FairX in January as part of its goal of offering crypto futures and options trading to its clients. FairX was selling futures products and was already registered with the Federal Commodity Futures Trading Commission (CFTC), giving Coinbase an ongoing start in the $3 trillion crypto derivatives market.

Now Coinbase has rebranded FairEx as the Coinbase Derivatives Exchange, and its “NanoBitcoin Futures” – 1/100th of Bitcoin, marketed under the ticker BIT – is its first listed crypto derivatives product. “This is a step towards creating a robust and regulated crypto derivatives market,” a Coinbase spokesperson said. decrypt.

If BIT futures were available today, they would be worth around $211 based on the $21,000 BTC price at the time of writing.

Boris Ilevsky, Head of Coinbase Derivatives Exchange, said in a statement that FairX “brings together a world-class team with deep expertise in product development, market structure, compliance, market-leading exchange technology and a proven ability to deliver listed futures.”

With Coinbase’s user-friendly interface, the derivatives exchange aims to make the trading of crypto derivatives more accessible.

Futures are a type of derivative financial product that sets a date and price in the future at which an asset should be sold, regardless of the actual market price at the time. When the SEC finally allowed bitcoin ETFs in October, it only allowed bitcoin futures ETFs, not yet “spot” ETFs tied to the current price of bitcoin.

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Many traders prefer futures because they allow for round-the-clock trading, low upfront investments, “and the ease of going long and short,” Ilevsky said. “Our BIT futures contracts will provide similar benefits but are designed with the retail trader in mind.”

Competing exchange FTX is on a similar path after it acquired LedgerX in August. Binance also offers derivatives products, but has withdrawn in some markets due to regulatory concerns.

It is important to note that BIT futures will not yet be offered directly from Coinbase, but only from third-party retail brokers and clearing firms. Starting June 27, Coinbase BIT futures will be available from firms such as EdgeClear, Ironbeam, NinjaTrader, Optimus Futures, Stage 5 and Tradevote.

Coinbase cannot offer futures directly unless it receives regulatory approval for its own FCM (Future Commission Merchant) license.

Although the overall crypto market cap has shrunk significantly in recent weeks, Ilevsky said the increased reach and additional product development will “unlock significant growth.”

“It is more important than ever to bring the benefits of futures to the broader market,” he said, “so that traders of all types can access the regulated US crypto derivatives markets to express their views or hedge their underlying crypto assets.”

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