Coinbase Expands Derivatives Offerings for Non-US Retail Traders

UTC by Tolu Ajiboye · 3 min read
Coinbase Expands Derivatives Offerings for Non-US Retail Traders
Photo: Depositphotos

Coinbase now offers crypto derivatives trading to eligible customers outside of the United States, for BTC, LTC, XRP and ETH.

Coinbase has taken a significant step to cater to the growing demand for crypto derivatives trading by launching perpetual trading for eligible non-US retail customers. These users can trade perpetual futures through the Coinbase Advanced platform. According to an official announcement, eligible retail customers outside the United States can now access perpetual trading for four cryptocurrencies: Bitcoin (BTC), Litecoin (LTC), Ether (ETH), and XRP. Coinbase also intends to introduce perpetual contracts for additional cryptocurrencies in the coming months.

These contracts will be settled via the USDC stablecoin to provide traders with stability in an otherwise volatile market. Perpetual futures trading is available to eligible customers at a maximum leverage of 5x for BTC, ETH, and LTC contracts, and 3x for XRP.

To ensure the security and integrity of their perpetual futures trading platform, Coinbase has sought regulatory oversight from the Bermuda Monetary Authority. This move reflects the growing need for regulatory compliance in the crypto industry. It is also Coinbase’s attempt at establishing trust and transparency among market participants. The exchange has also implemented financial safeguards featuring an Insurance Fund and a Liquidity Support Program funded using USDC.

The Case for Coinbase Perpetual Futures: Growing Trend in Crypto Derivatives

The launch of perpetual trading by Coinbase underscores the increasing popularity of derivatives within the crypto space. According to Coinbase, these instruments represent a substantial portion of the crypto derivatives market and account for 75% of worldwide crypto trading volume.

The appeal of perpetual futures lies in their unique characteristics, which allow traders to access the crypto market with greater capital efficiency and reduced upfront investment. Additionally, the availability of leverage in these contracts further enhances capital utilization and profit potential, although it also carries inherent risks.

Coinbase Advanced seeks to streamline the trading experience for customers by consolidating spot and derivatives trading into a single interface. This integration simplifies the trading process and offers advanced features like order types and APIs for automated trading. Traders can also access TradingView charts to gain insight into market trends and develop their trading strategies.

Coinbase’s perpetual futures trading feature ensures adequate capitalization through an Insurance Fund and Liquidity Support Program funded in USDC.

Coinbase Boosts Liquidity despite Position as the World’s Largest Bitcoin Entity

Coinbase recently suspended 80 non-USD trading pairs as it tries to boost liquidity. This follows a similar action in September when the exchange suspended 41 non-USD pairs for the same reason.

As of late September, Coinbase held 5% of all Bitocin in existence, according to an Arkham post. The blockchain analysis and intelligence platform announced that Coinbase’s reserves held 1 million Bitcoin, about $25 billion at the time. Arkham described Coinbase as “the largest Bitcoin entity in the world”, adding that the exchange has about as much Bitcoin as Satoshi Nakamoto, the anonymous creator of Bitcoin.

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