Coinbase has expanded its trading services to include perpetual futures for eligible customers in specific non-U.S. jurisdictions. The new feature is part of Coinbase Advanced, the company’s trading platform targeted at experienced retail traders. This move comes in response to a crypto derivatives market that, according to Coinbase, comprises 75% of the total cryptocurrency trading volume worldwide.
The introduction of perpetual futures is aimed at capitalizing on their growing prominence in the crypto trading landscape. These financial instruments provide traders the flexibility of trading on margin, requiring less initial capital. The futures also allow traders to go either long or short, offering a method of risk management for their crypto investments.
According to Coinbase’s blog post, Coinbase Advanced initially offers four perpetual contracts: XRP, BTC, ETH, and LTC. Leverage varies among these contracts, with up to 5X for BTC, ETH, and LTC, and up to 3X for XRP. Settlements are done in USDC, a stablecoin recognized for its global trustworthiness. The company has indicated plans to add more contracts in the upcoming months. Additionally, a temporary low fee rate is in effect—0% for makers and 0.03% for takers. While these contracts are currently accessible via the web platform, mobile trading options are said to be in development.
Coinbase asserts that its new perpetual futures contracts meet rigorous compliance standards, adding a layer of assurance for traders. These contracts are offered through Coinbase International Exchange and are subject to oversight by the Bermuda Monetary Authority.
Coinbase places emphasis on its security measures and transparent operations, highlighting audited financial statements that confirm a 1:1 ratio of customer assets. The company’s Insurance Fund and Liquidity Support Program, backed by USDC, provide additional capitalization for their futures exchange. Unlike some platforms, Coinbase does not partake in market-making activities; instead, liquidity is supplied by independent providers who have undergone compliance checks.
Coinbase has established a contact channel for institutional investors interested in these new trading options. However, accessibility to these futures is limited to non-U.S. customers who pass eligibility checks. Moreover, retail clients based in the United Kingdom are restricted from this service.
Featured Image via Coinbase