Coinbase Launches 24/7 Crypto Futures
Coinbase announced on March 10th its plan to offer 24/7 trading for Bitcoin (BTC) and Ether (ETH) futures to US residents. This launch also includes perpetual futures trading with long-date expirations.
Addressing Market Inefficiencies
Coinbase highlights that a significant portion of the crypto derivatives market operates outside the US, forcing American traders to contend with limited trading hours and expiring contracts. This, Coinbase argues, creates inefficiencies in the market. Futures contracts, typically involving an agreement to buy or sell an asset at a predetermined price and date, are addressed by the introduction of perpetual futures—contracts without a defined expiration date.
Regulatory Considerations and Competition
Regulatory uncertainty surrounding crypto perpetual futures has previously limited US access to these products. Coinbase stated that it's actively collaborating with the Commodity Futures Trading Commission (CFTC) to ensure compliance. This proactive approach aims to provide clarity and meet the agency's regulatory standards for commodities perpetual futures.
Coinbase's entry into this space introduces competition from established players like CME Group, which reported $6.1 billion in revenue in 2024 and an average daily trading volume of $10 billion for crypto derivatives (although limited to six days a week). Robinhood also plans to offer Bitcoin and Ether futures, further intensifying competition.
The Growing Crypto Derivatives Market
The crypto derivatives market demonstrated substantial growth, reaching $1.3 trillion in monthly trading volume in September 2023 (according to Alpha Point), surpassing the spot crypto market. Non-US markets currently dominate centralized derivatives trading volume.
Coinbase's Strategy and Existing Offerings
Coinbase already provides crypto derivatives trading for US residents through Coinbase Financial Markets; however, the 24/7 and perpetual futures offering represents a significant expansion. This strategic move aims to capture a larger share of the growing US crypto derivatives market.
Note: Codeum offers comprehensive blockchain security and development services, including smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultation, and partnerships with launchpads and crypto agencies. Contact us to discuss how we can secure your project.