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Coinbase to Launch First Listed Crypto Derivatives Product

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Coinbase Derivatives Exchange, formerly FairX, is ready to launch its first registered crypto derivative product, Nano Bitcoin (BIT) futures.

BIT futures on derivatives exchange Coinbase

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According to the official ad, BIT will be available to retail investors for trading from June 27 on the CFTC regulated futures exchange. Boris Ilyevsky, head of derivatives exchange Coinbase, revealed that each BIT futures contract will represent 1/100th of a bitcoin.

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Initially, the derivatives product will be available for trading through several brokerage intermediaries, including retail brokers 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.

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Coinbase is currently awaiting regulatory approval of its own futures commission merchant (FCM) license in order to offer margined futures contracts directly to its customers.

Boris Ilyevsky, head of derivatives exchange Coinbase, said:


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“It is more important than ever to bring the benefits of futures to the wider market so that all types of traders can access the regulated U.S. crypto derivatives markets to express their opinion or hedge their underlying crypto assets.”

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

Ilevskiy said the small-sized BIT futures contract will also require less initial capital than traditional futures products and is designed specifically for retail traders. The CEO went on to add that BIT could create a real opportunity to significantly expand retail participation in the U.S. regulated cryptocurrency futures markets.

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

FairX Coinbase Acquisition

Coinbase first tapped into the derivatives space after purchasing U.S. derivatives platform FairX, which was already registered with U.S. regulators earlier this year. It was later renamed to Coinbase Derivatives Exchange.

Although US companies such as Kraken and CME Group also offer these services, however, many platforms are reluctant to delve into derivatives due to regulatory concerns. On the other hand, Binance and OKEx account for the lion’s share of derivatives offerings outside the US.

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

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Credit : cryptopotato.com

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