- Coinbase announces the addition of three cryptos – Polkadot, Internet Computer, and Near Protocol to its perpetual futures contracts pool.
- This is part of its plans to expand its product options and provide investors with the chance to minimize risk.
Coinbase shows commitment to expanding its trading landscape with the launch of perpetual futures contracts for three cryptocurrencies: Polkadot (DOT), Internet Computer (ICP), and NEAR Protocol (NEAR). According to the announcement, users can access these perpetual futures contracts on the Coinbase International Exchange and Coinbase Advanced platforms. For context, these are financial derivatives meant for traders to speculate the price movement of an asset without necessarily owning it. Coinbase explained this on its official website:
They (Perpetual futures contracts) seek to replicate the performance of an underlying spot asset and do not have an expiration date, allowing you to continue to hold your positions until they’re closed or liquidated. Trading perpetual futures makes use of margin to enable trading with less upfront funds (i.e. your margin requirements) than traditional spot market trading.
According to the report, Coinbase continues to expand its range of trading instruments to enable investors to have options in trading futures contracts. On top of that, the investors have the chance to deploy the portfolio diversification strategy to minimize risk while taking advantage of the market movement.
Past Efforts of Coinbase to Advance its Perpetual Futures Contracts
In May 2023, Coinbase reached an advanced stage of its perpetual futures contracts initiative through the launch of the Coinbase International Exchange accompanying its class F license from the Bermuda Monetary Authority. This move was to enable non-US citizens to trade in perpetual futures. Later, it received another green light to extend the perpetual futures to non-US retail investors.
According to the exchange, the perpetual futures contracts were designed with a stringent compliance standard on the Coinbase International Exchange. As of the second quarter of last year, it had recorded a national trading volume of $5.5 billion.
As announced in Phase II of our “Go Broad, Go Deep” strategy, we are dedicated to partnering with high-bar global regulators to build a crypto regulatory framework that allows crypto technology to continually drive innovation. We chose to build our business and become a public company in the US believing that the US should be at the forefront of efforts to update our financial system. However, in expanding greater access to perpetual futures to eligible non-US customers, we are excited to further our mission to help update the global financial system and provide more economic freedom and opportunity for users around the world.
In October last year, users in non-US jurisdictions got the chance to trade perpetual futures on Coinbase Advanced. It is important to note that the global derivatives market makes up 75% of the total crypto trading volume worldwide. As of last year, the advanced customers were able to trade BTC, ETH, LTC, and XRP on the platform. The exchange also disclosed that it would be adding more contracts in the coming months. Also, customers would benefit from a low introductory fee rate of 0% (maker) and 0.03% (taker).
Coinbase has stated that it does not engage in market making. According to them, their liquidity is provided by established and independent liquidity providers undergoing rigorous compliance review.
