Coinbase Triumphs: NFA Approves Cryptocurrency Futures Trading

In a historic move, the major cryptocurrency exchange gains the green light for Bitcoin and Ether futures in the US.

The National Futures Association, a CFTC designated SRO, has approved Coinbase Financial Markets. as a registered Futures Commission Merchant .

Coinbase can now offer futures contracts in BTC and ETH to eligible customers in the US.👇
— Coinbase 🛡️ (@coinbase) August 16, 2023

As the cryptocurrency sphere witnesses momentous strides, Coinbase, one of the leading cryptocurrency exchanges, has made headlines yet again. The US National Futures Association (NFA) has granted Coinbase the green light to provide cryptocurrency futures trading for its eligible US clientele.

Revealed on August 16, Coinbase's newly acquired approval entitles them to function as a Futures Commission Merchant (FCM) platform. Through this, they can now present Bitcoin and Ether futures contracts, overseen by the Commodity Futures Trading Commission (CFTC).

Coinbase remarked on this milestone: “This critical step fortifies our promise to offer a regulated and trustworthy crypto platform for our dedicated customers.”

However, eager investors must exercise patience. Coinbase's official website indicates, “US regulated futures trading will be available shortly. Enroll now to join the waiting list and secure early access.”

Interestingly, the company's data underlines the vast magnitude of the global crypto derivatives sector. Accounting for a staggering 75% of worldwide crypto trading volumes, Coinbase accentuates the derivatives' potential: “Margin trading allows customers amplified access to the crypto world, demanding a lesser initial investment than traditional spot trading.”

Coinbase had earlier revealed its intentions to offer BTC and ETH futures for institutional investors in June. They had also eyed launching a derivatives exchange in Bermuda, underscoring their vision for global expansion.

This approval follows in the wake of the lawsuit filed against Coinbase by the U.S. Securities and Exchange Commission, accusing them of selling unregistered securities.

However, this latest development is viewed as a significant win in the crypto landscape. Especially when considering the heavyweight derivatives exchanges already operating in the US, such as CME and CBOE.

Analysts and industry insiders are buzzing. Avichal Garg, founder of Electric Capital, ponders over Coinbase's contrasting engagements with different regulators. Former CFTC Commissioner, Brian Quintenz, championed the open dialogue between regulators and tech innovators, while Coinbase CEO, Brian Armstrong, hailed this as a monumental juncture for crypto clarity in the US.

Traditionally, firms like the Chicago Mercantile Exchange and the Chicago Board Options Exchange have dominated futures trading in the US. However, Coinbase's recent step sets it apart as the pioneering crypto-centric company to offer both traditional spot crypto trading and futures products.

According to CoinGecko, as of May, the global crypto derivatives market hovered just below the $3 trillion mark. Mizuho Securities analyst, Dan Dolev, remarked on the increasing total market Coinbase can now address. Jeff Sekinger of Orca Capital predicts Coinbase's evolution as a pivotal gateway for traders, and CoinShares' Meltem Demirors noted the dynamic shifts in US crypto trading.

Coinbase's ambition to offer BTC and ETH futures contracts emerged in mid-2022. With the recent approval, the broad spectrum of eligible US retail customers can access these futures, though the specific launch date remains undisclosed.

In the stock market, the news saw COIN drop by 1.56%, settling at $77.7 post-trading hours. Yet, 2023 has been bountiful for Coinbase, as its shares surged by a formidable 130%.

Coinbase's monumental feat marks an exciting chapter in the US crypto narrative, one that promises lucrative opportunities and robust growth.