Coinbase announced on March 10 that it plans to offer 24/7 trading for Bitcoin (BTC) and Ether (ETH) futures to US residents. The exchange is also launching perpetual futures trading with long-date expirations.
According to Coinbase, much of the current crypto derivatives market takes place outside of US borders, with American traders having to navigate fixed hours and expiring contracts, “which can create inefficiencies.”
Futures are a type of derivative that involves creating a contract to buy or sell an asset at a certain price and date. When the futures lack a date for the buying and selling of an asset, they are called perpetual futures, or “perpetuals” for short.
Regulatory uncertainty surrounding crypto perpetual futures has led many exchanges to disallow US residents from trading such products. In its announcement, Coinbase said it is working with the Commodity Futures Trading Commission for clarity. The agency oversees the trading of perpetuals for commodities to ensure these products “meet regulatory requirements.”
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The crypto derivatives market reached $1.3 trillion in monthly trading volume in September 2023, according to Alpha Point, significantly exceeding the spot crypto market. For centralized derivatives, non-US markets lead in trading volume.
Coinbase faces competition in US derivatives market
Coinbase’s new services face competition from various companies, including the CME Group, a US derivatives exchange with $6.1 billion in revenue in 2024. In the last quarter of 2024, the CME Group clocked an average daily trading volume of $10 billion for crypto derivatives. However, the derivatives are only available for trading six days a week.
In a February 2024 earnings call, Lynn Martin, CME’s chief financial officer, said crypto derivatives were among the “contracts that we saw the largest increases [in] this year.”
Coinbase may also face competition from rival Robinhood, which announced in January its own plans to offer Bitcoin and Ether futures. Coinbase already offers a crypto derivatives trading option for US residents on Coinbase Financial Markets.
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