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Coinbase offers “nano” bitcoin futures via futures exchange

  • Coinbase said its “nano” bitcoin futures contracts require less upfront capital than traditional products
  • Each contract offered through third-party retail brokers is 1/100th of a bitcoin in size

Major U.S. exchange Coinbase announced that it will begin listing “nano” (BIT) bitcoin futures contracts next week through a recent platform acquisition aimed at entering the lucrative crypto derivatives market open up.

Each contract offered through third-party retail brokers is 1/100th of a bitcoin in size. They are expected to start trading on the Coinbase Derivatives Exchange, formerly FairX, on June 27, according to a company blog post on Thursday.

FairX, a derivatives exchange regulated by the Commodity and Futures Trading Commission, was acquired earlier this year – for an undisclosed sum – to diversify Coinbase’s offering.

Coinbase, which acquired FairX in January, is awaiting approval for a license to operate as a futures commission dealer, which will allow it to offer margined futures contracts directly to its clients.

The acquisition is an “important stepping stone” in Coinbase’s journey to offering crypto derivatives to retail and institutional customers in the United States, the exchange provider said at the time.

The BIT contract will become Coinbase’s first publicly traded crypto derivatives product and comes as trading volume for the sector continues to see big numbers — in the trillions of dollars.

A recent report by research firm CryptoCompare shows that crypto derivatives volume was around $3.19 trillion in May. The derivatives market now accounts for 61.7% of the total crypto market, the study shows.

Coinbase hopes that its retail-focused contracts, coupled with its user-friendly interface, will be enough to draw users away from rivals like Binance, which accounted for 58% of total derivatives volume over the same period.

“At 1/100th the size of a bitcoin, it requires less upfront capital than traditional futures products and creates a real opportunity for significant expansion of retail participation in the regulated U.S. crypto futures markets,” Coinbase said in its post.

An attempt to tap into derivatives trading fees coincides with the exchange’s decision to end its Pro service, which caters to more experienced traders. Instead, Coinbase Pro will be integrated into a unified account within the more beginner-friendly Coinbase platform called Advanced Trade.

The major U.S. stock exchange has suffered multiple setbacks following a bearish crypto market, including a falling share price amid 1,100 layoffs while hundreds more job offers were rejected.

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  • Sebastian Sinclair

    blocks

    Senior Reporter, Asia News Desk

    Sebastian Sinclair is a senior news reporter for Blockworks, which operates in Southeast Asia. He has experience covering the crypto market as well as specific developments affecting the industry including regulation, economics and mergers and acquisitions. He currently holds no cryptocurrencies. Contact Sebastian by email at [email protected]

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