A big US exchange called Coinbase will start selling “Nano” (BIT) bitcoin futures contracts the week after next. This is because Coinbase recently bought a platform to get into the lucrative crypto derivatives market.
Each contract provided by retail third-party brokers will be worth 1/100th of a bitcoin. A business blog post on Thursday said that they will start trading on the Coinbase Derivatives Exchange, which used to be called FairX, on June 27.
FairX, a derivatives exchange licensed by the Commodity Futures Trading Commission, was bought at the beginning of this year for an unknown price so that Coinbase could offer more products.
Coinbase bought FairX in January and is now trying to get a license to be a futures commission merchant. This would let it sell margined futures contracts directly to its customers.
The exchange operator said at the time that the purchase was a “critical milestone” on the way to bringing crypto futures to retail and institutional clients in the US.
The BIT contract will be the first crypto derivatives product to be listed on Coinbase at a time when trade volumes in the sector are still in the billions of dollars.
A research company called CryptoCompare recently said that the volume of crypto derivatives in May was around $3.19 trillion. According to the report, right now, 61.7 percent of the whole crypto market is made up of the derivatives market.
Coinbase hopes that its contracts for retail customers and easy-to-use interface will lure customers away from competitors like Binance, which had a 58 percent share of all derivatives volume during the same time period.
“At 1/100th the size of a Bitcoin, it requires less cash up front than most futures products and offers a real chance that retail participation in US-regulated crypto futures markets will grow by a large amount,” Coinbase said.
The exchange plans to end its Pro service for skilled traders because it wants to make more money from fees for trading derivatives. Under the name “Advanced Trade,” Coinbase Pro will be combined into a single account on the Coinbase platform, which is better for beginners.
Due to a falling crypto market, the largest U.S. exchange has had to deal with a number of problems, such as a falling share price, the firing of 1,100 workers, and the withdrawal of job offers for hundreds more.