On March 10, Coinbase, a leading cryptocurrency exchange, announced its decision to enable 24/7 futures trading for Bitcoin (BTC) and Ether (ETH) for US residents. In addition to this, the exchange is initiating a perpetual futures trading system with extended expiration dates.
Coinbase’s statement indicates that a significant portion of the current crypto derivatives market operates outside the US, causing American traders to work within fixed hours and deal with expiring contracts, which can result in inefficiencies.
Futures are a specific kind of derivative involving a contract to purchase or sell an asset at a predetermined price and time. Perpetual futures, also known as “perpetuals,” are futures that do not have a fixed date for the asset’s buying and selling.
Due to regulatory uncertainties, several exchanges have prohibited US residents from trading crypto perpetual futures. However, Coinbase stated that they are collaborating with the Commodity Futures Trading Commission to ensure that these offerings comply with regulatory norms.
The crypto derivatives market surpassed the spot crypto market in September 2023, hitting $1.3 trillion in monthly trading volume, as per Alpha Point. Centralized derivatives are predominantly traded in non-US markets.
Despite facing stiff competition from several companies, including the CME Group, a US-based derivatives exchange with a revenue of $6.1 billion in 2024, Coinbase is forging ahead with its plans. CME Group reported an average daily trading volume of $10 billion for crypto derivatives in Q4 2024, but these derivatives are available for trade only six days a week.
Coinbase may also be up against Robinhood, which declared its intention to offer Bitcoin and Ether futures in January. Coinbase currently provides a crypto derivatives trading option for US residents via Coinbase Financial Markets.
