Coinbase Now Allows Small US Investors to Trade Bitcoin and Ethereum Futures

Brian Armstrong speaks at a crypto conference in New York.Brian Armstrong is the CEO of Coinbase. Michael Nagle—Bloomberg/Getty Images

The largest cryptocurrency exchange in the United States announced Thursday that small investors, also known as retail traders, will now be able to trade. Bitcoin And Ethereum eventually on its American platform.

Customers can access the two new financial products through Coinbase Advanced, an offshoot of the exchange’s main platform that allows investors to trade more financially complex crypto products. Contrary to FMCa US derivatives exchange that also sells Bitcoin and Ethereum futures, Coinbase’s offering targets traders with shallower pockets.

“These contracts offer lower initial capital requirements and may provide an affordable investment option for a broader range of retail customers,” the company wrote in a blog post announcing the products.

Coinbase’s unveiling of a U.S. futures contract for Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, comes as the exchange seeks to diversify its products to compete with Binance, the largest cryptocurrency exchange in the world.

Futures contracts allow traders to not only speculate on the future price of an asset, but also to gamble with more assets than they actually own. Customers can, for example, put up $100 in collateral and trade $200 worth of cryptocurrency, thereby magnifying their losses and gains as a cryptocurrency’s price rises and falls.

By most estimates, the global trading volume in crypto derivatives markets, which include futures contracts, far exceeds that of crypto spot markets, or the simple buying or selling of cryptocurrencies. The 24-hour trading volume of crypto derivatives was around $37 million on Binance on Wednesday, compared to around $9 million in spot, according to has CoinMarketCap.

Binance dominates the crypto derivatives market. The 24-hour trading volume of its closest competitors, OKX and BitMart, was just over a quarter of that of Binance. If its recent product announcements are any indication, Coinbase, which has historically been more willing than Binance to play nice with regulators and avoid risky crypto financial instruments, is looking for a piece of that pie.

In April, the publicly listed crypto exchange announcement that it had obtained a regulatory license in Bermuda. In May, it is then spear an offshore exchange based in Bermuda, specializing in futures contracts. And then, at the end of September, open its offshore stock exchange to retail investors.

However, the exchange’s most recent unveiling of crypto futures took place in the United States, where it obtained a license to sell the risky financial instruments. earlier this year.


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