Coinbase to Offer ‘Nano’ Bitcoin Futures Via Derivatives Exchange
Coinbase is attempting to buoy short-term pain with declining crypto spot prices by jumping into the derivatives game via its first offering
Blockworks exclusive art by axel rangel
key takeaways
- Coinbase said its “Nano” bitcoin futures contracts will require less upfront capital than traditional products
- Each contract, offered through third-party retail brokers, will be sized at 1/100th of a bitcoin
Major US exchange Coinbase said it will begin listing “Nano” (BIT) bitcoin futures contracts next week through a recent platform acquisition aimed at tapping into the lucrative crypto derivatives market.
Each contract, offered through third-party retail brokers, will be sized at 1/100th of a bitcoin. They are expected to begin trading on the Coinbase Derivatives Exchange, formerly FairX, on June 27, according to a company blog post on Thursday.
FairX, a Commodity and Futures Trading Commission-regulated derivatives exchange, was acquired at the beginning of this year — for an undisclosed sum — in an attempt to diversify Coinbase’s offerings.
Coinbase, which scooped up FairX in January, is awaiting approval for a license to operate as a futures commission merchant, which will enable it to offer its clients margined futures contracts directly.
The acquisition marked a “key stepping stone” along Coinbase’s path to offering crypto derivatives to retail and institutional customers in the US, the exchange provider said at the time.
The BIT contract will become Coinbase’s first listed crypto derivatives product, and comes as trading volumes for the sector continue to post large numbers — in the trillions of dollars.
A recent report by research firm CryptoCompare shows crypto derivatives volumes stood at roughly $3.19 trillion for the month of May. The derivatives market now represents 61.7% of the total crypto market, the research shows.
Coinbase is hoping its retail-focused contracts, coupled with its user-friendly interface, will be enough to draw users away from competitors such as Binance, whose share of total derivatives volume stood at 58% for the same period.
“At 1/100th of 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 US regulated 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 geared toward sophisticated traders. Instead, Coinbase Pro will be rolled into one unified account within the more novice-friendly Coinbase platform under the name Advanced Trade.
The major US exchange has suffered several setbacks following a declining crypto market, including a falling share price amid 1,100 staff layoffs while rescinding job offers to hundreds more.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
