Coinbase Offers Nano Bitcoin Futures

Reportedly, Coinbase will list a derivative product called Nano Futures Contract this week.

This will be the first product to be listed on Coinbase Derivatives Exchange, giving investors the opportunity to purchase a linked contract for one percent of Bitcoin. Customers can purchase Nano Futures Contracts through third-party brokers. In other words, customers will not be able to buy nano futures contracts directly from Coinbase until the exchange receives a license to operate as a futures commission merchant.

The company floated the idea of launching derivatives to its customer base in the United States after the company acquired derivatives exchange FairX in January of this year.

Americans have long traded derivatives on foreign exchanges, and have always favored high leverage products that US exchanges lack.

Accordingly, the volume of crypto derivatives trading in December 2021 in the United States has surpassed the volume of spot transactions. Binance alone recorded $52.5 billion in derivatives trading volume in the 24 hours ended Friday afternoon, compared with $12.7 billion in spot products. Coinbase alone reached $1.7 billion in spot trading during the same period.

It should be noted that the new nano futures will not offer leveraged betting to drive volume on exchanges like Binance.

Coinbase’s new product will enter the established crypto derivatives market, while the company has to deal with cash flow issues.

Dan Dolev, the senior analyst at Mizuho, believes that the new product does not address the central problem of competitors offering zero transaction fees, which would severely impact revenue if Coinbase competes.

Coinbase shares plummeted on May 3, 2022, from $130.15 to $62.71 when the market closed last Friday.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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