In recent news, the American-based cryptocurrency exchange Coinbase allegedly plans to buy FTX Europe, which is currently insolvent. In another report, an executive at Coinbase exchange hinted that the film might issue a native token for its Ethereum 2 layer called Base.
According to the report, despite its ongoing legal battle with the United States Securities and Exchange Commission, Coinbase Exchange is not relenting to expand its business globally. The American-based crypto platform has reportedly revisited its long-term interest in buying the collapsed FTX exchange.
The report revealed that when FTX Europe collapsed in November 2022, Coinbase was one of the organizations that showed interest in acquiring the troubled firm, but its bid was rejected. However, the report states that Cpinbase is set to launch another bid to acquire the bankrupt FTX exchange for the second time.
Coinbase crypto exchange aimed at expanding its derivative business operations beyond America to multiple offshore countries. The spokesperson for Coinbase asserted that the firm believes acquiring FTX Europe, whose parent firm, FTX, collapsed in November last year, would be a step in the right direction to bringing its business expansion goal to reality. However, Coinbase is currently pending the acquisition.
Coinbase Bid For FTX Europe For The Second Time
Furthermore, the report said in November 2022, when FTX collapsed, Coinbase bid to buy it, and again, in September 2023, it was bidding to buy it. A Coinbase spokesperson reaffirmed the report, saying the firm is always meeting with different organizations globally and analyzing opportunities in order to expand its business strategically.
Apart from the Coinbase exchange, the report revealed that several other giant crypto firms showed interest in buying the collapsed FTX Europe, including Trek Labs and Crypto.com. In addition, the report declared that the deadline for the acquisition has been slated for September 24th. It is noteworthy that FTX spent about $400 million to set up the FTX Europe business, which other exchanges wish to acquire now.
Also, the troubled FTX Europe was registered and licensed under the Cyprus financial regulators. Prior to its collapse, the firm was the only firm in the region that offered crypto assets derivatives products like perpetual futures.
For context, cryptocurrency derivatives products are financial tools that derive value from the crypto asset it is built on. Swaps, futures, and options are typical examples of existing crypto derivatives. It helps investors to speculate, leverage, and hedge the crypto market. Also, many traders and institutional investors often make use of the investment strategy.
Derivatives Trading Volume Increases Globally
Meanwhile, experts claimed that acquiring the troubled FTX Europe can help to boost the fee revenue of Coinbase exchange as crypto assets derivatives trading is thriving and booming in the prevalent bearish market. According to statistics, the Coinbase exchange made a quarterly revenue of about $707 million in the 2nd quarter of this year. $327 million of the $707 million was reportedly raised from spot trading. The total revenue for Q2 was 13% lower than the revenue Coinbase generated in Q1.
However, there was a 13.7% increase in the volume of derivatives traded on centralized exchanges globally in Q2 rather than Q1 as the total revenue generated from derivatives products rose to $2.13 trillion, according to the report. In Q2, Binance led the list of volumes of derivatives trade, generating a whopping $1.21 trillion. Immediately behind it was the OKX exchange, which raised about $416 billion, recording a 44.8% increase on its platform. Following it was the CME exchange that recorded a 28.6% increase as it generated $37.9 billion.
Coinbase Exchange has expanded its operation scope to offer derivative products to American citizens. According to the report, the US regulators granted the giant crypto exchange’s application to provide eligible investors with crypto futures investments in the region. The endorsement encouraged the crypto platform to launch BTC and ETH futures contracts via its derivatives platform, FairX, which is regulated by the CFTC (Commodity Futures Trading Commission).
Meanwhile, Coinbase Exchange recently announced that the global cryptocurrency assets derivatives market makes up about 75% of the total global trading volume. It also added that it is a pivotal access point for traders.
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