Coinbase stock up as exchange announces crypto futures for US traders

Coinbase, one of the leading cryptocurrency exchanges, saw its stock rise following the announcement of a new offering that allows US traders to access cryptocurrency futures through its platform. Coinbase stock jumped above $79 in the early trading hours before retracing below $77.50 at press time.

The move comes after Coinbase obtained regulatory clearance to operate as a futures commission merchant (FCM) from the National Futures Association in August.

Futures trading for retail traders

In a blog post, Coinbase revealed that eligible US traders can now leverage regulated, leveraged cryptocurrency futures via Coinbase Financial Markets (CFM).

This new development caters to retail traders, commonly referred to as smaller investors, providing them with an opportunity to trade Bitcoin (BTC) and Ethereum (ETH) futures.

Coinbase has structured these contracts with retail traders in mind. The futures contracts are sized at 1/100th of a Bitcoin and 1/10th of Ethereum, significantly reducing the upfront capital requirements and making them an affordable investment option for a broader range of retail customers.

Global crypto derivatives market growth

The global crypto derivatives market represents approximately 75% of the global crypto trading volume, highlighting the increasing demand for derivative products in the cryptocurrency space. This move by Coinbase places it firmly in this expanding market segment.

This expansion into cryptocurrency futures trading positions Coinbase as a comprehensive platform for traders and investors interested in cryptocurrencies. It allows them to hedge their risk, diversify their portfolios, utilize leverage, and speculate on the market’s direction.

The announcement has been met with positive sentiment in the market, leading to a boost in Coinbase Global (NASDAQ: COIN) stock price.

The expansion into cryptocurrency derivatives is part of Coinbase’s strategy to supplement declining spot trading volumes and create new revenue streams. Analysts have noted that, while material revenues may not be immediate, Coinbase’s entry into the derivatives market could make it a leading platform for retail and institutional traders in the United States over time.

This development is a significant step in Coinbase’s ongoing efforts to cater to the evolving needs and demands of cryptocurrency traders. It allows more accessible options for cryptocurrency trading while adhering to federal regulations, ensuring investor protection and market integrity.

With this latest announcement, Coinbase continues to position itself as a key player in the cryptocurrency market, offering an array of services for both retail and institutional clients.

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