Coinbase, a popular cryptocurrency exchange, recently announced the launch of its native Bitcoin and Ethereum futures contracts for retail traders in the United States. This new service is being rolled out via the Coinbase Advanced platform, offering regulated crypto futures contracts to eligible US investors.
Coinbase’s launch of Bitcoin and Ethereum futures contracts for retail traders is a significant development in the cryptocurrency market. The exchange received approval from the Commodity Futures Trading Commission (CFTC) subsidiary National Futures Association (NFA) in August, allowing them to bring regulated cryptocurrency futures contracts to the US market.
One of the key features of Coinbase’s crypto futures offering is its accessibility to investors with shallower pockets. The futures contracts come in small sizes, commonly referred to as “nano” forms. This allows traders to engage in trading 1/100th of a Bitcoin futures contract and 1/10th of Ethereum contracts. These smaller contract sizes translate to lower upfront capital requirements, making them affordable investment options for a broader range of retail investors.
To access the new futures contracts, users will need to utilize the Coinbase Advanced web platform, as futures trading is not currently available on mobile devices. Once users sign in and complete the personal details verification step, they can begin forecasting the price of Bitcoin and Ethereum by selecting either a long or short position. Coinbase has also included a leverage option for investors to potentially enhance their earnings, although they emphasize that leverage can be risky, and investors may lose their entire deposits if the market moves against them. The specific amount of leverage available to futures traders has not been disclosed.
Account Settlements using USD
For account settlements, all futures withdrawals will be settled using the US dollar. This ensures that traders can easily convert their gains back into a fiat currency and maintain stability in their portfolios.
While Coinbase celebrates the launch of its Bitcoin and Ethereum futures contracts, it still faces challenges on the domestic front. The company is currently engaged in a battle with the US Securities and Exchange Commission (SEC) over allegations of not meeting the requirements of being a security trading entity. Coinbase has strongly denied the SEC’s claims, asserting that its activities do not fall under the agency’s purview. The stalemate in this standoff reflects the increased regulatory scrutiny faced by cryptocurrency exchanges, as the SEC ramps up regulatory activities in the nascent industry.
In an effort to influence regulatory sentiment and advocate for a less hostile clampdown on cryptocurrencies, Coinbase has launched an online media campaign with the hashtag #standwithcrypto. The exchange has mobilized its community to contact the US Congress, with over 16,000 calls and emails already made. Additionally, they have garnered more than 100,000 crypto advocate signups and received over $2 million in donations to support their cause. Coinbase’s goal is to reshape the regulatory landscape and foster a more crypto-friendly environment.
Despite regulatory challenges, Coinbase remains focused on expanding its global footprint. The exchange recently announced that it has chosen Ireland as its European hub, highlighting the regulatory clarity provided by the Markets in Crypto Asset (MiCA) legislation as a deciding factor. This expansion demonstrates Coinbase’s commitment to operating within the bounds of regulatory frameworks and its determination to provide services to cryptocurrency users across the globe.
Coinbase’s launch of Bitcoin and Ethereum futures contracts for US retail traders marks an important milestone for the exchange and the broader cryptocurrency market. By making regulated crypto futures contracts accessible to a wider range of investors, Coinbase aims to promote inclusivity and provide investment opportunities for those with shallower pockets. While facing regulatory challenges and ongoing battles with the SEC, Coinbase continues to strengthen its position in the market and expand its global presence. As the cryptocurrency industry evolves, Coinbase remains at the forefront, shaping the future of digital asset trading.
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