The Major American Cryptocurrency Exchange Coinbase, third in the world by 24-hour volume, intends to enter derivatives trading markets, after acquiring derivatives exchange FairX.
FairX is a designated derivatives exchange (DCM) regulated by the Commodity Futures Trading Commission (CFTC). Despite being relatively new to the market as it was launched in May 2021, FairX has built brokerage partnerships with industry leaders TD Ameritrade and E * Trade, along with 18 others.
Derivatives trading refers to the trading of various exotic products linked to the future value of the underlying assets, rather than trading the assets themselves.
In an announcement on January 13, Coinbase explained its plans to launch crypto derivatives trading for its clients in the United States. “We want to make the derivatives market more accessible to our millions of retail clients.”
A Tweet back of the exchange said that Adding derivatives trading to your suite of products would ultimately benefit your platform investors.
“Creating a transparent derivatives market will unlock greater participation in the crypto economy for retail and institutional investors alike.”
Crypto derivatives represent a lucrative $ 137 billion in 24-hour trading volume over the last day, according to CoinGecko. This puts it well above the roughly $ 55 billion of spot trading volume on cryptocurrency exchanges in the same period.
Regarding the importance of creating and nurturing liquid derivatives markets, Coinbase said: “Developing a transparent derivatives market is a critical turning point for any asset class”.
Top crypto derivative exchanges include Binance, FTX, Bybit, and OKEx, all of them also competitors of Coinbase in the spot markets.
Coinbase’s launch of regulated crypto derivatives markets would likely immediately place it among the top exchanges in that category immediately., since it has 56 million active users, of which 8.8 million carry out at least one operation per month, according to BusinessofApps.