Coinbase doesn’t fare quite as well with the US financial regulator, the SEC, but the company has continued to expand its international business relationships in the US. Coinbase has announced that the US’s largest crypto exchange has received regulatory approval to offer Bitcoin and Ethereum-based crypto futures to eligible customers in the United States.
- Bitcoin today only at 23,949.89 EUR
- Dramatic crash in the last 7 days of over 11%
- Crypto futures are among the riskier futures transactions
- Coinbase must comply with numerous requirements for approval
- Instead of bitcoin could sonic be a coin to trade
Coinbase is now offering crypto futures to US customers
Coinbase Financial Markets Inc. announced that it has received regulatory approval from the National Futures Association, one of the Commodity Futures Trading Commission CFTC designated self-regulatory organization. This allows Coinbase to act as a Futures Commission Merchant (FCM) and grant eligible US customers access to crypto futures. As a Futures Commission Merchant, Coinbase is authorized to offer futures trading as a stockbroker.
This means Coinbase accepts and executes futures buy and sell orders from eligible customers. A permanent minimum capital of 100,000 US dollars must be maintained permanently. A fee is payable to the CFTC for each trade.
Futures on cryptos – This is how futures transactions work
Crypto trading has evolved significantly in recent years. Providers have entered the market and have developed a wide variety of trading options. New asset classes and trading methods have also emerged as a result of technological advances.
Futures have been around on the classic financial market for a very long time. With the advent of cryptocurrencies, crypto futures are the logical consequence of improved market access.
The crypto derivatives market represents $3 trillion* globally and we believe additional product development and accessibility will enable significant growth. It is more important than ever to bring the benefits of futures to a broader market so that all types of traders can access the regulated US crypto derivatives markets. Source: Coinbase Blog
A crypto futures is a futures transaction based on a contract between two parties, namely the trader and the investor. The underlying cryptocurrency is bought or sold at a fixed price and at a specific time in the future.
As a forward transaction, the seller is contractually obliged to deliver the subject matter of the contract, i.e. in the case of the cryptocurrency, based on the contract details.
The buyer, on the other hand, is obliged to purchase the base currency as agreed at a future time at the specified price. The real value of the base currency at a specified time in the future is irrelevant.
Experts rate futures and crypto futures as a tricky investment, because betting on a future course can result in both large profits and large losses.
That means Coinbase’s approval for the crypto market
As the first cryptographic market leader ever, many experts consider Coinbase’s approval a historic milestone in the development and global acceptance of cryptocurrencies.
Last year, Coinbase acquired the FairX platform, a CFTC-regulated trading platform, and later released it under the new name Coinbase Derivatives Exchange.
Now accessible to third parties, this platform has amassed a massive liquidity pool of $4.7 billion in Bitcoin futures and $2 billion in ETH futures. The latest regulatory approval for futures trading came after the Coinbase Derivatives Exchange launched new bitcoin and ether futures contracts for institutional clients in June.
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Coinbase said the reason for the expansion and new offerings was that it saw strong demand from institutional investors for advanced derivatives products.
By being able to take long and short positions on cryptocurrencies like Bitcoin and Ethereum, investors manage the risk of their underlying crypto assets. The benefit of crypto futures is also access with less upfront investment than traditional spot trading. Leverage makes this possible, but it is also extremely risky.
In addition to risk management and improved precision, these institutional contracts come with significantly lower fees than traditional offerings, allowing institutions to maximize their capital efficiency. By reducing trading costs, Coinbase Derivatives Exchange seeks to create an environment that encourages greater accessibility and participation, ultimately benefiting the entire crypto ecosystem. Source: Coinbase Blog
Therefore, it makes sense that Coinbase would only be allowed to offer the crypto futures to institutional investors in the US. This ensures that they have sufficient knowledge of the market and are aware of the risks.
Coinbase’s new offering also gives traders the chance to trade crypto futures with a size of 1 BTC or 10 ETH and thus generate further returns in a highly dynamic market environment.
Alternative for private small investors: Launchpad.XYZ
Since only institutional investors have access to Coinbase US crypto futures, private investors from Germany are unfortunately left out. But there are alternatives, which are usually associated with lower risks, since there is no leverage and no price bets. The proposal relates to a new coin that could explode in 2023, Launchpad.XYZ’s $LPX.
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#Trade #altcoins #Web3 #crypto pic.twitter.com/qaqn9PoHW5— Launchpad.xyz (@launchpadlpx) August 18, 2023
The native utility token $LPX was not only developed on the Ethereum token standard, ERC20, for price stabilization, but also coupled to Tether’s stablecoin, the USDT. Therefore, the purchase is possible with Fiat, as well as with ETH and USDT.
The platform sees itself as central access to Web 3.0 and offers a cross-platform opportunity to start trading. The real-time trading signals are just as much a part of the functions as the NFT marketplace, a decentralized exchange, a gaming hub and the extensive knowledge area.
Token holders also have the opportunity to benefit from the Launchpad.XYZ trading bot via free Telegram access. Currently, the project is in the final stages of presale, the token costs only $0.0445. Private investors have already invested more than 1.39 million US dollars in the development, the token launch is imminent.
Conclusion: It was a stormy day for Bitcoin. It is up to the analysts whether it was really just the sale of SpaceX’s entire Bitcoin holdings that triggered the price slide, or whether there were other reasons. Undeterred by this, Coinbase continues to expand its involvement in the USA and apparently also unfazed by the current SEC problems.
However, the offerings of the BTC and ETH futures are only aimed at institutional investors in the United States. Private investors in this country could our Recommendation for the new coin from Launchpad.XYZ follow to diversify their portfolio.
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About the author: Stefanie Herrnberger works as a freelance speaker and editor. Her many years of professional experience in the areas of blockchain, cryptocurrencies and NFTs offer her the perfect background to report on current news and developments on decentralized and central financial markets. Stefanie has been investing in cryptocurrencies for several years. She understands the challenges and opportunities for crypto traders. Publications: https://de.cryptonews.com/editors/stefanie-herrnberger https://blockchain-technologie.digital/ https://www.facebook.com/groups/cryptonewsde/