Coinbase Expands Offerings with Perpetual Contracts
Coinbase, a major player in the cryptocurrency exchange market, has announced an expansion of its futures trading offerings. Starting November 14, the platform will introduce perpetual futures contracts for Solana (SOL) and Avalanche (AVAX). This move marks a significant extension of Coinbase’s derivative market capabilities, aiming to provide traders with more options in the rapidly evolving crypto landscape.
Perpetual Contracts Explained
The upcoming SOL-PERP and AVAX-PERP markets are set to launch on the Coinbase International Exchange & Coinbase Advanced, subject to liquidity conditions. Perpetual futures, unlike traditional futures, do not have an expiration date, allowing traders to speculate on price movements of underlying assets indefinitely. This flexibility provides opportunities for arbitrage, leveraging, and hedging.
However, these contracts also carry risks like over-leveraging and liquidation, demanding careful management from investors.
Compliance with Local Regulations
Coinbase emphasizes its compliance with local regulations concerning crypto derivatives. Consequently, the perpetual futures trading on the Advanced Trading platform is available only to users in specific non-US regions. This adherence to regulations is further underscored by Coinbase International Exchange’s regulatory approval from the Bermuda Monetary Authority in September.
Perpetual Futures Surge in Crypto Trading
The introduction of perpetual futures in crypto markets has been met with growing interest and demand. Data from Laevitas reveals that as of November 10, the global centralized exchange (CEX) perpetual volume reached a staggering $195.3 billion. This trend reflects the increasing appeal of perpetual contracts among traders.
Conor Ryder, a research analyst at Kaiko, highlighted the rising popularity of these contracts, noting that the Bitcoin perpetuals-to-spot-volume ratio is at its highest in nearly two years.
Hot Take: The Future of Crypto Trading Looks Perpetual
Coinbase’s expansion into offering perpetual contracts for Solana and Avalanche signals a growing trend in crypto trading towards these types of instruments. With increasing demand and interest from traders around the world, it’s clear that perpetual futures are here to stay and will continue to shape the future of cryptocurrency trading.
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