Coinbase to Launch Bitcoin and Ether Futures Contracts
Coinbase, one of the world’s leading cryptocurrency exchanges, has announced its plans to launch Bitcoin and Ethereum futures contracts for institutional investors on June 5. This move comes as Coinbase aims to expand its offerings and provide institutional clients with greater access and flexibility in managing their crypto exposure.
Lower Fees and CFTC Regulation
The futures contracts will be made available through the Coinbase Derivative Exchange, a platform regulated by the U.S. Commodity Futures Trading Commission (CFTC). Coinbase is committed to providing lower fees compared to other U.S.-regulated derivatives exchanges, making it an attractive option for institutional investors looking to trade Bitcoin and Ethereum futures.
To ensure seamless access to these contracts, Coinbase has partnered with leading Futures Commission Merchants (FCMs), brokers, and front-end providers. This collaboration will enable institutional clients to easily engage in trading activities and manage their portfolios effectively. The Coinbase Bitcoin (BTI) and Coinbase Ether (ETI) futures contracts will be available through these third-party FCMs and brokers, offering investors options to express directional views or track the performance of Bitcoin and Ether in a capital-efficient way.
Coinbase’s decision to introduce these institutional-sized USD-settled contracts is aimed at empowering institutional participants with greater precision in managing their crypto exposure. With 1 Bitcoin and 10 Ether contracts available, investors will have more flexibility in expressing their views on the price movements of these cryptocurrencies. Additionally, the availability of USD-settled contracts provides a convenient way for institutions to track and manage Bitcoin and Ether returns.
Expanding Beyond the US
In recent months, Coinbase has been exploring friendlier jurisdictions for its services and has obtained a license in Bermuda. This move allows Coinbase to operate the Coinbase International Exchange, catering to non-U.S. institutional investors by offering perpetual futures contracts. The company is also evaluating options in the European Union and the UK to establish its base, indicating its intention to diversify beyond the U.S. market.
Coinbase’s expansion beyond the United States is partly driven by the increasing regulatory scrutiny faced by crypto firms in the country. Recent investigations and calls for regulation of certain services have caused disillusionment within the industry. While Coinbase has refuted claims of providing unregulated securities, the intensified regulatory environment has prompted the company to seek opportunities in more crypto-friendly jurisdictions. By doing so, Coinbase aims to maintain its leadership position in the rapidly evolving cryptocurrency business.