KEY TAKEAWAYS
- Coinbase Derivatives is launching US Perpetual-Style Futures on July 21, providing a regulated alternative to offshore perpetual futures for US traders.
- The new futures aim to fill a gap in the US derivatives market by offering products that adhere to CFTC regulations and closely track spot prices.
- These futures include nano Bitcoin and nano Ether contracts, designed for capital-efficient trading with enhanced risk management and 24/7 trading hours.
- The launch is expected to transform the US derivatives market by improving market access, efficiency, and innovation for US traders.
Coinbase Derivatives has announced the launch of US Perpetual-Style Futures, set to debut on July 21. This new product suite aims to provide a regulated alternative to offshore perpetual futures, which have been largely inaccessible to US traders. The launch is designed to fill a significant gap in the domestic derivatives market by offering products that closely track spot prices while adhering to Commodity Futures Trading Commission (CFTC) regulations.
The introduction of these futures marks a significant development in the US crypto market. Perpetual futures have become a dominant trading instrument globally, accounting for a substantial portion of crypto trading activity. However, US traders have often had to resort to offshore exchanges to access these products, facing regulatory and counterparty risks. Coinbase’s new offering seeks to mitigate these issues by providing a domestic, compliant alternative.
Features of US Perpetual-Style Futures
The US Perpetual-Style Futures will include two contracts: nano Bitcoin Perpetual-Style Futures (0.01 BTC) and nano Ether Perpetual-Style Futures (0.10 ETH). These contracts are designed to offer regulated exposure to the crypto market, with benefits such as simplified contract expirations, capital-efficient trading, and enhanced risk management.
These futures are structured as long-dated contracts with five-year expirations and 24/7 trading hours. A key feature is the funding rate mechanism, which ensures that futures prices remain closely aligned with spot markets. Funding accrues hourly and is settled twice daily, with adjustments made to traders’ accounts during designated cash adjustment periods. This setup aims to provide a trading experience similar to spot markets, with the added advantages of leverage and regulated clearing.
Impact on the US Derivatives Market
The launch of US Perpetual-Style Futures is expected to have a transformative impact on the US derivatives market. By offering a regulated alternative to offshore perpetual futures, Coinbase aims to enhance market access, efficiency, and innovation for US traders. More details on trading these new futures contracts will be shared soon, as Coinbase plans to expand access to retail users in the coming months.
This development represents a significant milestone for Coinbase and the broader US crypto market, potentially paving the way for increased participation and growth in the derivatives sector.
For more information, the announcement can be found here.
Why This Matters: Impact, Industry Trends & Expert Insights
Coinbase is set to launch US Perpetual-Style Futures on July 21, offering a regulated alternative to offshore perpetual futures and aiming to fill a gap in the domestic derivatives market.
A recent Chambers report highlights that the US crypto derivatives market is undergoing significant changes due to regulatory developments and market growth. This aligns with Coinbase’s strategic move to introduce regulated perpetual futures, providing US traders with compliant access to these popular trading instruments.
Insights from Bernstein analysts indicate that Coinbase is strengthening its market leadership and institutional business, particularly with its perpetual futures offerings. This supports the potential impact of Coinbase’s new product in expanding its derivatives market share and enhancing its competitive position in the US crypto ecosystem.
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