The recent approval granted by Coinbase to provide crypto futures in the United States is a critical accomplishment for the digital assets landscape. The approval places Coinbase alongside leading derivative exchanges, including Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE).
Coinbase Secures Approval to Offer Crypto Futures
The approval of the leading digital asset exchange will allow Coinbase to grant retail customers access to the crypto futures. It marks a major regulatory victory granted despite the annoying battle with the US securities regulator, the Securities and Exchange Commission (SEC).
The National Futures Association (NFA), in a Wednesday, August 16 statement, indicated to approve Coinbase to run a Futures Commission Merchant (FCM) platform. NFA operates as the designated commodities regulator in the United States.
The approval granted to Coinbase triggered admiration from the crypto industry commentators acknowledging the approval as a win for crypto. The digital assets commentators are lauding the gesture considering that the US SEC alleged the exchange contravened the securities laws by avoiding the registration of its token offerings.
Coinbase Approval by CFTC Exposes SEC’s Anti-crypto Stance
Electric Capital executive Avichal Garg questioned why Coinbase successfully registered with the Commodities Futures Trading Commission (CFTC), yet SEC accuses the firm of being unwilling to undergo the hard work in registration. The Thursday, August 17 tweet by the founder of the investment management firm is receiving support from crypto commentators.
A former commissioner at the CFTC, Brian Quintenz, indicated that Coinbase futures approval shows that crypto innovation is a reality provided the regulator engages in constructive dialogue to support the technology. The crypto investment firm a16z policy executive lauded the approval as a win for the US customers following a series of denials propagated by regulators unwilling to support the new technology.
US Edges Closer to Crypto Clarity
Coinbase chief executive Brian Armstrong acknowledged the approval constitutes an essential moment edging the United States closer to crypto clarity. He added that the approval places Coinbase within the position navigated by traditional finance firms.
Coinbase identifies the approval as a critical milestone the US crypto-native entity realizes. Armstrong admitted that the approval would allow the platform to offer futures products besides spot crypto trading. It joins the institutional exchange CME and CBOE in offering Bitcoin and Ether futures.
The approval will propel Coinbase to facilitate investor tap into the massive crypto derivative market reported by CoinGecko in May as worth closer to $3 trillion. Coinbase illustrated that the global crypto derivatives segment accounts for three-quarters of the aggregated trading volumes.
Global Crypto Derivatives Harbors Untapped Potential for Investment
Mizuho Securities analyst Dan Dolev indicated in a commentary published by Barron that approval of Coinbase futures would increase the company’s total addressable market. He added that the global crypto derivatives have untapped potential projected to quadruple the spot market.
Orca Capital chief executive Jeff Sekinger projects that Coinbase would dramatically become the sought-after access point for investors seeking exposure to derivative products. Also, the approval for Coinbase futures will address the demand for enhanced exposure to derivatives while guaranteeing flexibility to the investors.
CoinShare chief Strategy executive Meltem Demirors admitted that the approval marks an exciting moment for the US digital assets landscape. The executive considers the product addition would excite investors when pivoted to the US trading hours.
Coinbase had, in mid-last year, announced it would offer Bitcoin and Ethereum futures contracts. Although delayed for over 12 months, the new approval grants Coinbase offering eligibility to retail and institutional clients.
Coinbase Set to Clarify Date to Unveil Futures Product
Coinbase has not clarified when the futures product will become available to investors. A review of the Coinbase stock (COIN) shows no signs of reacting to the news.
COIN stock performance contrasted by declining by 1.56% to exchange hands at $77.7 after the trading. Awareness of the new product unveiling to the investors would likely push Coinbase shares though already 130% up in 2023.
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