- In October, the SEC approved a Bitcoin futures ETF.
- It is now possible to buy and sell 1/100th of a Bitcoin at a time.
$3 Trillion Crypto Derivatives Market
Coinbase purchased FairX in January in order to provide its clients with the ability to trade cryptocurrency futures and options. As an existing registered futures product seller with the federal Commodity Futures Trading Commission (CFTC), FairX gave Coinbase an early advantage in the $3 trillion crypto derivatives market.
It is now possible to buy and sell 1/100th of a Bitcoin at a time on Coinbase’s “Nano Bitcoin futures” exchange, now known as the Coinbase Derivatives Exchange (CDE). Based on the current BTC price of $21,300, BIT futures would be valued at roughly $213 today.
Boris Ilyevsky of Coinbase Derivatives Exchange stated:
“World-class team with deep expertise across product development, market structure, compliance, market-leading exchange technology and a proven ability to deliver listed futures.”
Combined with Coinbase’s user-friendly interface, the derivatives exchange hopes to make crypto derivatives trading easier. Derivative financial products such as futures allow investors to lock in a date and price for the sale of an asset in the future, independent of the item’s current market value. In October, the SEC approved a Bitcoin futures ETF, but not a Bitcoin “spot” ETF that was pegged to the current price of Bitcoin.
After purchasing LedgerX in August, another exchange, FTX, is following a similar course. Due to regulatory concerns, Binance has withdrawn from various areas where it provides derivative products. With the market performing poorly for quite some time, and as a result, exchanges are cutting down on their workforce.
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