Coinbase follows the lead of FTX and Crypto.com by purchasing a US based derivatives platform. Futures are coming to crypto, not just Bitcoin. Covered: Coinbase Acquires Futures Exchange FairX Coinbase Approach To A Regulated Crypto Derivatives Market Coinbase Acquires Futures Exchange FairX Today, Coinbase announced via a blog post that they are acquiring FairX, a […] The post Coinbase Purchases Derivatives Exchange FairX; Crypto Futures Incoming appeared first on CryptosRus.

Coinbase Purchases Derivatives Exchange FairX; Crypto Futures Incoming

Coinbase follows the lead of FTX and Crypto.com by purchasing a US based derivatives platform. Futures are coming to crypto, not just Bitcoin.

Covered:

  • Coinbase Acquires Futures Exchange FairX
  • Coinbase Approach To A Regulated Crypto Derivatives Market

Coinbase Acquires Futures Exchange FairX

Today, Coinbase announced via a blog post that they are acquiring FairX, a Commodity Futures Trading Commission(CFTC)-regulated derivatives exchange. The purchase by Coinbase could set in motion a regulated crypto derivatives market to Coinbase’s millions of users.

Currently, only a handful of exchanges allow US investors to participate in Bitcoin and Ether futures, but this is likely to change with large centralized exchanges like Coinbase buying US-based derivatives platforms.

Even though this is big news for Coinbase, Crypto.com and FTX have both already purchased CFTC-regulated derivatives exchanges. FTX purchased LedgerX in August 2021, and Crypto.com purchased the retail derivatives platform Nadex in December 2021.

The narrative of large centralized crypto exchanges (like Coinbase) getting ready for futures trading for crypto in general within the US is not surprising. Bitcoin finally got a  futures ETF in October of 2021, and that was probably the necessary catalyst for more to come. With the purchases of CFTCs by Coinbase, FTX, and Crypto.com, it is only a matter of time until retail investors are able to participate in futures trading of not just Bitcoin and Ethereum, but other altcoins as well.

Coinbase Approach To A Regulated Crypto Derivatives Market

The purchase of FairX by Coinbase was a “key stepping stone” to offer crypto derivatives to both retail and institutional investors within the US. Coinbase wants to provide an “industry-leading, simplified user experience” to a derivatives crypto market accessible by their millions of users. They claim a derivatives crypto market will be necessary for the long-term success of their company and that it is in high demand from certain investors:

“Deep and liquid derivatives markets are essential to the functioning of traditional capital markets. These products are in high demand from investors who seek to effectively manage risk, execute complex trading strategies, and gain exposure to crypto outside of existing spot markets.”

Furthermore, Coinbase believes that FairX is the right CFTC to pursue their mission. FairX’s technology is straightforward and easy to understand, which will help Coinbase bring a simplified user experience to their customers.

The acquisition is still subject to closing conditions and reviews, but it is expected that the deal will close in Coinbase’s first fiscal quarter. We will keep you updated.

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