For some time, participants in the US cryptocurrency market have been eagerly awaiting the expansion of futures contract options. Now the moment has come – Coinbase, one of the largest cryptocurrency exchanges, has received approval to introduce these contracts for its clients, which may influence the future of this rapidly evolving market.
When CoinFund, a leading organization in the cryptocurrency field, pointed out the gaps in the range of futures contracts, the market listened attentively. It turned out that Coinbase took up the challenge and made a decision that could change the face of cryptocurrency investing.
According to recent reports, Coinbase received official permission to introduce cryptocurrency futures contracts for American clients. This significant event may closely connect the two Bitcoin markets while stimulating further adoption of cryptocurrencies.
By registering as an intermediary with the Commodity Futures Trading Commission (CFTC), Coinbase Financial Markets will offer both immediate (spot) cryptocurrency trading and futures contracts. These contracts have become the foundation for several Bitcoin-based ETFs in the US.
Although the first Bitcoin futures-based ETFs were launched in 2021, they provide investors the opportunity to invest in contracts traded on exchanges regulated by the CFTC. Interestingly, such contracts give the right to buy or sell Bitcoin in the future but do not entitle one to actually own it.
Some experts, such as Michael Saylor, founder and chairman of MicroStrategy, believe that Bitcoin futures are not a fully satisfactory way for institutions to engage in the cryptocurrency market. Saylor emphasized that such ETF contracts do not precisely track the value of Bitcoin.
However, Coinbase’s entrance will likely change the direction of the wind. The ability to trade both cryptocurrencies on the spot and futures contracts in one place is likely to improve market liquidity and increase arbitrage opportunities.
And while the market still awaits ETFs based directly on Bitcoin prices, Coinbase has taken a step forward, bringing investors closer to this goal.
Many financial institutions, including the global giant BlackRock, await the green light from the Securities and Exchange Commission (SEC) to introduce ETFs based directly on Bitcoin. Unfortunately, over the years, the SEC has expressed concerns about the potential for Bitcoin market manipulation.
However, from an institutional perspective, as emphasized by Christopher Perkins from CoinFund, Coinbase’s new move is a significant breakthrough. Allowing institutions to trade futures contracts in compliance may open the door to broader adoption. Over time, we’ll see if Coinbase’s new offering brings the expected benefits to the cryptocurrency market.
