Coinbase Advanced Gives Retail Traders Access to Regulated Crypto Futures Contracts
Coinbase Advanced now allows retail traders in the United States to access regulated crypto futures contracts. This comes four months after Coinbase Financial Markets (CFM) obtained approval to operate as a Futures Commission Merchant (FCM) entity. The National Futures Association (NFA), a Commodity Futures Trading Commission-designated self-regulatory organization, granted regulatory approval to CFM on August 17.
According to CFM, Coinbase Advanced customers in the U.S. can trade nano-sized futures contracts that are 1/100th of 1 Bitcoin (BTC) and 1/10th of 1 Ether (ETH). These contracts have lower upfront capital requirements, making them more affordable for retail customers. Andrew Sears, the CEO of CFM, emphasized the accessibility of these contracts for a broader range of retail traders.
Trading Nano-Sized Futures Contracts
With the nano-Ether contract, participants can manage risk, trade on margin, or speculate on the price of Ether. On the other hand, the nano-Bitcoin contract enables users to bet on the future price of BTC. In addition to offering regulated, leveraged, and cash-settled crypto futures, Coinbase Advanced users will have access to educational content through Coinbase Learn. To create an FCM futures account, U.S. residents with an active Coinbase spot trading account are eligible.
The services have been launched on the web version and will soon be available on mobile devices.
Coinbase’s Move into Crypto Futures Services
Coinbase’s decision to launch crypto futures services is not surprising given its decline in spot trading volume this year compared to 2022. In Q3 2023, Coinbase recorded approximately $76 billion in spot trading volume, marking a 52% drop compared to the same period last year. However, despite this decline, Coinbase has gained market share as Binance faces increased regulatory scrutiny.
Hot Take: Coinbase Expands Access to Regulated Crypto Futures Contracts
Coinbase Advanced’s introduction of regulated crypto futures contracts for retail traders in the U.S. is a significant development in the cryptocurrency industry. By offering nano-sized futures contracts with lower upfront capital requirements, Coinbase aims to attract a broader range of retail customers. This move comes at a time when Coinbase’s spot trading volume has experienced a decline, making the expansion into futures services a strategic decision to maintain market share. With access to educational content and plans for mobile availability, Coinbase Advanced positions itself as a comprehensive platform for trading and learning about cryptocurrencies.
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