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Coinbase launches first crypto derivatives product

June 24, 2022

Coinbase launches first crypto derivatives product
Coinbase Derivatives Exchange, formerly known as FairX, is launching its first crypto derivatives product this month, hoping to attract more retail traders.

The CFTC regulated futures exchange will launch its derivatives product, Nano Bitcoin futures (BIT), on June 27, according to a statement sent to CoinDesk. “The crypto derivatives market represents $3T in volume worldwide and we believe that additional product development and accessibility will unlock significant growth,” the statement said.

Coinbase said it’s also awaiting regulatory approval on its own futures commission merchant (FCM) license to offer margined futures contracts for its clients.

The launch comes at a highly volatile period in the crypto market, set off by the dramatic collapses of Terra’s LUNA, crypto lender Celsius and crypto fund Three Arrows Capital (3AC). Bitcoin’s price has fallen about 56% this year, while Ethereum’s native token ether is down roughly 70%.

Coinbase bought FairX earlier this year, to launch crypto derivatives products. FairX launched its futures exchange platform in May 2021 after receiving regulatory approvals in late 2020.

Futures contracts are smaller in size, require less upfront capital than traditional bitcoin futures products, and can be used as a hedge for trading strategies for both institutional and retail traders.

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