Coinbase Derivatives Exchange will start trading BTC and ETH perpetual futures on June 5, 2023, for non-US institutional clients only.
Leading American crypto exchange Coinbase has announced its plans to introduce futures contracts for Bitcoin (BTC) and Ether (ETH) in its newly launched derivative marketplace regulated by the Commodity Futures Trading Commission (CFTC).
The new venture, Coinbase Derivatives Exchange, officially debuted last month in Bermuda following approval from the country’s financial regulator, the Bermuda Monetary Authority (BMA).
The company said the derivative platform would enable traders to speculate on the prices of BTC and Ether using perpetual futures contracts, offering leverage of up to 5X. Furthermore, all trades conducted on the marketplace will be settled in the stablecoin USDC, ensuring stability and reliable value representation for participants.
Fixed Size of 1 BTC and 10 Ether
In a blog post dated June 1, Coinbase said it is set to launch two contracts: Coinbase Bitcoin (BTI) and Coinbase Ether (ETI) on June 5. The product will have a fixed size of 1BTC and 10 Ether. According to the firm, the sizing strategy was designed to help customers effectively control their market exposures and achieve attractive returns with lower fees than other derivative exchanges.
“With the launch of these institutional-sized USD-settled contracts, we look to empower institutional participants with greater precision in managing crypto exposure, expressing directional views, or tracking Bitcoin and Ether returns in a capital-efficient way. Coinbase Derivatives Exchange is committed to delivering innovative solutions that cater specifically to the needs of institutional investors,” the company said.
Coinbase stated that it is committed to delivering innovative solutions that cater specifically to the needs of institutional investors. On that note, the company has partnered with third-party institutional futures commission merchants (FCMs) and brokers to bring new futures contracts available to users. The exchange plans to offer these companies incentive programs for adopting the product.
Coinbase said its decision to introduce futures contracts for Bitcoin and Ether was influenced by valuable feedback gathered during its launch of Nano Bitcoin futures and Nano Ether futures contracts. According to the blog post, the move was driven by insights and opinions shared by users, highlighting their importance and demand in the market.
Coinbase Eyes International Expansion
Meanwhile, the launch of Coinbase Derivatives Exchange in Bermuda is part of the company’s strategic move towards international expansion due to regulatory hurdles in the US.
Besides Bermuda, Coinbase is gearing toward European expansion, notably in the United Kingdom. In March, the exchange unveiled its global expansion plans in a program dubbed “Go Broad, Go Deep”, aiming to establish its presence across six continents in eight weeks.
The company’s CEO Brian Armstrong believes America is an important market for crypto. Still, the recent regulatory chaos in the nation could push many companies outside the region.
Aside from Coinbase, another crypto exchange Gemini is also exploring expansion outside the US. The company, led by the Winklevoss brothers, recently introduced an international derivatives marketplace for non-US customers to trade perpetual futures.