Derivatives arrive on Coinbase, following the purchase of FairX

The main US crypto exchange Coinbase, the third in the world by 24-hour volume, intends to enter the derivatives trading markets, after a...



The main US crypto exchange Coinbase, the third in the world by 24-hour volume, intends to enter the derivatives trading markets, after acquiring the FairX derivatives exchange.

FairX is a designated contract derivatives exchange (DCM) regulated by the Commodity Futures Trading Commission (CFTC). Although relatively new to the market, having launched in May 2021, FairX has entered into brokerage partnerships with industry leaders TD Ameritrade and E * Trade, as well as 18 others.

Trading in derivatives refers to the trading of various exotic products linked to the future value of the underlying assets, rather than the trading of the assets themselves.

In a January 13 announcement, Coinbase explained its intention to roll out crypto derivatives trading for its customers in the United States. Coinbase said, “We want to make the derivatives market more accessible for our millions of retail customers.”

A suite Tweeter of the exchange said adding derivatives trading to its product line would ultimately benefit investors on its platform.

“Creating a transparent derivatives market will unlock increased participation in the crypto economy for retail and institutional investors. “

Crypto derivatives represent a lucrative 24-hour trading volume of $ 137 billion in the past day, according to CoinGecko. This places it well above the roughly $ 55 billion in cash trading volume on crypto exchanges during the same time frame.

Related: Coinbase Announces ‘Almost Entire Business Will Close’ For Four Week-Long Breaks In 2022 To Allow Workers To Rejuvenate

Regarding the importance of creating and maintaining liquid derivative markets, Coinbase said, “The development of a transparent derivatives market is a critical inflection point for any asset class.”

The best crypto derivatives exchanges include Binance, FTX, Bybit, and OKEx, all of which are also Coinbase’s competitors in the cash markets.

The launch of Coinbase-regulated crypto derivatives markets would likely immediately propel it into the top exchanges in this category, as it has 56 million active users, of which 8.8 million make at least one transaction per month according to BusinessofApps.