Coinbase to Launch First Listed Crypto Derivatives Product

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Coinbase Derivatives Exchange, previously FairX, is all set to launch its first listed crypto derivatives product – Nano Bitcoin futures (BIT).

BIT Futures on Coinbase Derivatives Exchange

According to the official announcement, BIT will be available to retail investors to trade from June 27 on the CFTC-regulated futures exchange. Boris Ilyevsky, Head of Coinbase Derivatives Exchange, revealed that each BIT futures contract will represent 1/100th of a Bitcoin.

Initially, the derivatives product will be available for trading via several broker intermediaries, including retail brokers EdgeClear, Ironbeam, NinjaTrader, Optimus Futures, Stage 5, and Tradovate. Retail players can also access it via clearing firms ABN AMRO, ADMIS, Advantage Futures, ED&F Man, Ironbeam, and Wedbush.

Coinbase is currently awaiting regulatory approval on its own futures commission merchant (FCM) license in a bid to offer margined futures contracts directly to its clients.

Boris Ilyevsky, Head of Coinbase Derivatives Exchange, stated,

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

Futures have become a popular product among traders because of several reasons, including non-stop, lower advance investment, leverage, and the ease of going long and short.

Ilyevsky said the small-sized BIT Futures contract will also require less upfront capital than traditional futures products and is designed especially for retail traders. The exec went on to add that BIT has the potential to create a real opportunity for significant expansion of retail participation in US-regulated crypto futures markets.

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

Coinbase’s FairX Acquisition

Coinbase first tapped into the derivatives space after purchasing a US-based derivatives platform – FairX – already registered with US regulators earlier this year. It was later rebranded as Coinbase Derivatives Exchange.

While US-based companies such as Kraken and CME Group also offer these services, however, many platforms have been reluctant to delve deeper into derivatives due to regulatory concerns. On the other hand, Binance and OKEx account for the lion’s share of derivatives offering outside the US.

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

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