Coinbase Global inc. will launch its first crypto derivative product on June 27 as a way of increasing revenue and preparing for the future. Nano bitcoin futures contracts are said to be the basis for this derivative instrument (BIT). BTC represents 1/100th the value of each Bit, the article stated. Among its anticipated customers are ABN, Wedbush, and Ambro.
Coinbase’s Derivative Product: Additional Information
Third-party retail brokers like Optimus Futures and Ninjatrader sell the product to anyone who is interested in purchasing it. Coinbase is releasing a derivative product, despite just revealing that it would lay off 18% of its personnel.
Leading US crypto exchange has reduced its staff strength because of the crypto market winter. Following the acquisition of FairX, many in the cryptocurrency industry believe that Coinbase will soon launch a crypto derivative product.
FairX is a CFTC-regulated designated contract markets (DCM) exchange. It is stated in the announcement by Coinbase that they are interested in trading in crypto derivatives as trade volume in the market continues to grow. In the crypto derivatives market, the total trade volume is close to $3 trillion.
As a result, the exchange feels that adding a derivative product to its line of business will help it grow. A product that has been in high demand in the crypto market arena would also be a huge benefit. As a result of this new release,
There aren’t many crypto companies in the United States, but Coinbase is one of them. Due to stringent market rules, there are only a few players in the US crypto derivatives market. There are numerous major crypto companies with derivative products outside of the United States, as a result.
Coinbase Is Getting Its House in Order for Future Expansion
For long years, Cooinbase has lacked futures and options products in its product line. However, the well-known US exchange may be launching its first crypto derivative product due to current market conditions. Since January 2022, spot trade volumes have decreased dramatically due to the crypto winter.
As a result, Coinbase has seen a large decline in revenue. Spot trading accounts for more than half of Coinbase’s revenue. In the last several weeks, the value of digital assets like bitcoin has plummeted.
Leading crypto lending firms and hedge funds have been experiencing liquidity concerns, which have contributed to the market’s collapse. Three Arrows Capital and Celsius Network have had the most serious liquidity problems.
According to Coinmarketcap, the price of BTC has dropped by 30% since last month. Coinbase shares have fallen 77% since January 2022, according to new data from Bloomberg. An official at Coinbase, Boris Illyevsky, expressed excitement about the debut.
A large number of investors can now participate in the highly regulated futures market thanks to the exchange’s crypto derivative debut, according to him. The Coinbase derivatives product launch will take place on the Coinbase derivatives market, according to the release (formerly known as FairX). Coinbase Global Inc. has taken over ownership of this exchange.