Coinbase Launches 1st Crypto Derivatives Product, Focusing on Retail Brokers

Coinbase Derivatives Exchange (formerly FairX) is launching its first crypto derivatives product, Nano Bitcoin futures (BIT), on June 27.

Coinbase said that BIT would initially target several leading broker intermediaries, including retail brokers EdgeClear, Ironbeam, NinjaTrader, Optimus Futures, Stage 5, and Tradovate, and clearing firms ABN AMRO, ADMIS, Advantage Futures, ED&F Man, Ironbeam and Wedbush.

Coinbase is currently awaiting regulatory approval on the futures commission merchant (FCM) license. The FCM license will allow the company to offer margins futures contracts directly to clients.

Coinbase Derivatives Exchange is a CFTC-regulated Designated Contract Markets (DCM) futures exchange.

FairX, which launched its futures exchange platform in May 2021 was acquired by Coinbase earlier in 2022 to launch crypto derivatives products.

Even though the launch of the product comes at a highly volatile period in the crypto market, Coinbase said that the crypto derivatives market represents $3 trillion in volume worldwide, citing a report from Financial Times. 

Currently, the crypto market is witnessing a downturn following the dramatic collapses of Terra’s LUNA, crypto lender Celsius and crypto fund Three Arrows Capital (3AC). Furthermore, Bitcoin’s price has fallen about 56% this year and Ethereum’s native token ether is down roughly 70%.

The launch of BIT has come after the company planned to close down its Coinbase Pro platform by the end of the year, according to a report from Blockchain.News.

The exchange said the move was stirred by its collective effort to revamp how users interact with its platform as it seeks to provide a more flexible trading ecosystem.