Coinbase Derivatives Exchange Launches Bitcoin and Ether Futures

Coinbase Derivatives Exchange, a derivatives platform linked to its namesake cryptocurrency exchange, will introduce Bitcoin and Ether futures contracts for institutional clients on June 5. Coinbase Bitcoin (BTI) and Coinbase Ether (ETI) futures contracts (measured at 1 Bitcoin and 10 Ether per contract, respectively) will be accessible through third-party institutional Futures Commission Merchants (FCMs) and brokers, the company announced on Friday.

Coinbase added that it has witnessed increased demand for futures contracts among investors. Futures contracts are agreements that allow investors to buy or sell an asset at a predetermined price at a specific future time.

"With the launch of these institutional-sized USD-settled contracts, we look to empower institutional participants with greater precision in managing crypto exposure, expressing directional views, or tracking BTC and Ether returns in a capital-efficient manner," the exchange said.

Coinbase’s Global Crypto Derivatives Exchange

Early in May, Coinbase launched a global cryptocurrency derivatives exchange targeting institutional clients based outside the US. Afterwards, the new platform listed Bitcoin and Ether perpetual futures contracts with trades settled in the USD stablecoin. Unlike futures contracts, perpetual futures contracts do not have a specific expiry date.

The launch of the derivatives exchange follows Coinbase's acquisition of a regulatory license for digital asset exchange services, including token sale and issuance, in Bermuda. The step came after the publicly listed crypto company hinted at leaving the US due to regulatory concerns.

Struggles with the Regulators

In March, Coinbase received a Wells Notice from the Securities and Exchange Commission (SEC). The notice stated that the Nasdaq-listed company was breaching the US securities regulations by offering unregistered securities.

Additionally, the notice pointed out that the SEC could press further actions against the exchange, including an injunction or a cease-and-desist order. Responding to the SEC's notice, Coinbase's CEO Brian Armstrong faulted the agency for failing to provide proper regulations to the industry.

Nonetheless, the company is expanding its products' offering, most recently launching a zero-fee subscription model that lets users trade crypto at no fee with incentives of higher rewards. Dubbed Coinbase One, the service launched in 2021 in the US is under a beta program and has opened to users in the UK, Germany, and Ireland.