On June 1, Coinbase announced its intention to launch Bitcoin (BTC) and Ether (ETH) futures contracts on June 5 through its Commodity Futures Trading Commission (CFTC)-regulated derivatives exchange.
These futures contracts will primarily cater to institutional investors, offering them innovative solutions tailored to their specific needs.
Institutional-Sized Contracts for Effective Market Exposure Management
Coinbase’s newly announced institutional-sized contracts will feature a specific size of 1 Bitcoin and 10 Ether. This sizing is designed to assist clients in effectively managing their market exposure.
The decision to introduce these products was influenced by valuable feedback received by the exchange following the launch of its nano Bitcoin futures and nano Ether futures contracts.
Derivatives Exchange Expansion in Bermuda
In line with its international expansion strategy, Coinbase revealed on May 2 its strategic move to establish a derivatives exchange in Bermuda.
This exchange will enable traders to engage in speculation on the prices of Bitcoin and Ethereum through perpetual futures contracts.
With leverage of up to 5x, traders will have the opportunity to amplify their exposure to potential price movements.
Notably, all trades conducted on the exchange will be settled in Circle’s USD Coin (USDC) stablecoin, ensuring stability and reliability for participants.
Addressing the Need for Regulatory Clarity
Coinbase’s decision to launch a derivatives exchange aligns with its ongoing efforts to address the need for regulatory clarity regarding the trading of digital assets in the United States.
In response to Coinbase’s petition for a writ of mandamus, the U.S. Securities and Exchange Commission (SEC) communicated that the rulemaking process could potentially extend over several years, indicating that there is no immediate pressure to expedite the proceedings.