Coinbase, a leading cryptocurrency exchange, is set to introduce perpetual futures (perps) to its Coinbase Advance clients in international markets. The exchange will facilitate the settlement of contracts involving Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and XRP in USDC, while offering traders the ability to utilize up to 5x leverage (3x for XRP).
Traders will have the convenience of accessing both derivatives and cryptocurrencies through a unified web interface, with the added option to automate trades via application programming interfaces (APIs). In the initial phase of this launch, Coinbase will implement a 0% maker fee and a modest 0.03% taker fee.
Coinbase’s Global Expansion Amidst Domestic Challenges
Simultaneously, Coinbase has unveiled an ambitious initiative aimed at nurturing cryptocurrency talent from its regional office based in Germany. This strategic move follows a favorable response received after hosting a developer symposium in Berlin.
Underpinned by its current BaFin license, Coinbase is poised to operate across the European Union when the new Markets in Crypto-Assets bill is set to take effect in 2024. The exchange also has extensive expansion plans encompassing markets in Ireland, Benelux, the Nordics, Spain, and Italy.
This substantial overseas expansion comes against the backdrop of a 50% annual decline in trading volume recorded by Coinbase in Q3. This figure represents the lowest trading volume since Q3 2020 and is indicative of the ongoing effects of a bear market that commenced with the collapse of algorithmic stablecoin TerraUSD.
Notably, Coinbase recently expanded its footprint in Singapore and secured a license from the Bermuda Monetary Authority, overcoming legal challenges in the United States. In the U.S., the Securities and Exchange Commission (SEC) has leveled accusations against the exchange, alleging it operated as an unregistered brokerage and offered unregistered securities. The SEC further claimed that Coinbase made autonomous decisions to list high-risk coins using its internal framework. In response, Coinbase has invoked the “major questions doctrine,” a Supreme Court principle that contests the authority of federal agencies like the SEC to regulate matters of substantial economic and political significance.
Cautious Outlook for Futures Traders
Coinbase’s introduction of new cryptocurrency products comes at a time of uncertainty for the crypto industry. Ongoing geopolitical tensions in the Middle East could potentially hinder the progress of legislation aimed at combating crypto-related money laundering, which might further impact exchange volumes.
Investors heavily engaged in futures trading during bear markets should exercise caution, as extreme price fluctuations in the crypto market can have adverse consequences. Currently, open interest in Bitcoin futures stands at a significant 287 BTC, indicating the potential for substantial liquidations in both upward and downward price movements.
Market experts anticipate that the approval of U.S.-based spot Bitcoin exchange-traded funds (ETFs) could be a pivotal event shaping the crypto market’s future. Additionally, crypto prices tend to experience significant movements before and after Bitcoin halvings, with the fourth halving event slated for spring 2024.