Coinbase Introduces Crypto Futures Trading for US Traders

A big addition to its offerings, Coinbase Financial Markets has announced the formal launch of cryptocurrency futures trading for qualified US traders. The action was taken after the National Futures Association granted it permission to function as a commission merchant for futures earlier in August.

With the use of cryptocurrency futures trading, traders may legally commit to the purchase or sale of assets at predefined prices on predefined future dates. These contracts come with a number of strategic benefits, such as the ability to speculate on market fluctuations, leveraged trading, portfolio diversification, and risk hedging.

US traders need to have a spot trading account with the exchange and use the Coinbase Advanced trading interface in order to access these cryptocurrency futures. The futures contracts, which have sizes corresponding to 1/100th of a Bitcoin (BTC) and 1/10th of an Ethereum (ETH), were purposefully created to accommodate ordinary traders. Because of the lower initial capital requirements, this structure is a more accessible option for investors.

Diversifying Revenue Streams

Given that this industry accounts for over 75% of all worldwide cryptocurrency trading activity, Coinbase’s entry into this market is important. With the amount of spot trades dropping, this expansion gives Coinbase the chance to diversify its sources of income.

Compass Point Research and Trading analysts and Oppenheimer & Co. analyst Owen Lau are bullish on this project’s long-term prospects. They think it can position Coinbase as one of the top US providers of futures.

In tandem with its current legal dispute with the US Securities and Exchange Commission (SEC), Coinbase has entered the cryptocurrency futures trading market. Coinbase vigorously contests the SEC’s accusation that the business is functioning as an unlicensed exchange.

Coinbase had previously opened up its perpetual futures trading services to institutional non-US clients in May and to retail non-US customers in September, prior to launching cryptocurrency futures trading in the US. With this growth, Coinbase is demonstrating its dedication to providing a wider array of services to its clientele and its goal of being a major player in the changing bitcoin trading industry.