Coinbase, a major player in the cryptocurrency exchange market, has announced an expansion of its futures trading offerings. Starting November 14, the platform will introduce perpetual futures contracts for Solana (SOL) and Avalanche (AVAX). This move marks a significant extension of Coinbase’s derivative market capabilities, aiming to provide traders with more options in the rapidly evolving crypto landscape.
Coinbase Expands Offerings with Perpetual Contracts
The upcoming SOL-PERP and AVAX-PERP markets are set to launch on the Coinbase International Exchange & Coinbase Advanced, subject to liquidity conditions. Perpetual futures, unlike traditional futures, do not have an expiration date, allowing traders to speculate on price movements of underlying assets indefinitely.
This flexibility provides opportunities for arbitrage, leveraging, and hedging, which are essential tools for traders in the volatile cryptocurrency market. However, these contracts also carry risks like over-leveraging and liquidation, demanding careful management from investors.
Coinbase emphasizes its compliance with local regulations concerning crypto derivatives. Consequently, the perpetual futures trading on the Advanced Trading platform is available only to users in specific non-US regions. This adherence to regulations is further underscored by Coinbase International Exchange’s regulatory approval from the Bermuda Monetary Authority in September.
Initially, the platform offered four perpetual contracts featuring Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP), with leverages up to 5X, except for Ripple, which offers up to 3X leverage. All contracts are settled in the USD Coin (USDC) stablecoin, adding a layer of stability to the transactions.
Perpetual Futures Surge in Crypto Trading
The introduction of perpetual futures in crypto markets has been met with growing interest and demand. Data from Laevitas reveals that as of November 10, the global centralized exchange (CEX) perpetual volume reached a staggering $195.3 billion.
This trend reflects the increasing appeal of perpetual contracts among traders, with Coinbase’s competitors like Binance and OKX exchange also capturing significant volumes in this space. Conor Ryder, a research analyst at Kaiko, highlighted the rising popularity of these contracts, noting that the Bitcoin perpetuals-to-spot-volume ratio is at its highest in nearly two years.
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