Coinbase Financial Markets (CFM) recently obtained regulatory approval from the National Futures Association (NFA), a Commodity Futures Trading Commission-designated self-regulatory organization, to operate as a Futures Commission Merchant (FCM) entity.
This significant development opened the door for CFM to provide crypto futures services to eligible retail traders in the United States. After securing the regulatory green light on August 17, Coinbase Advanced introduced these regulated crypto futures contracts to US traders, making futures trading more accessible.
Coinbase: Empowering Retail Traders
Coinbase Advanced aims to democratize futures trading for retail crypto traders in the US. These futures contracts are tailored to retail traders, with contracts available for Bitcoin and Ethereum, sized at 1/100th of a Bitcoin and 1/10th of an Ethereum.
This sizing minimizes the upfront capital requirements, enabling a broader range of retail customers to participate in futures trading. With crypto futures contracts, traders can effectively manage risk on their underlying crypto assets by taking long or short positions.
These contracts also allow for trading with leverage, allowing traders to access the crypto market with less upfront investment. However, it is crucial to remember that leverage in futures trading can work both in favor and against the trader, potentially exceeding the initial investment amount.
To support traders in this venture, Coinbase Financial Markets offers an extensive library of educational content through Coinbase Learn. These resources cover everything from futures trading to understanding the associated benefits and risks.
It reflects CFM’s commitment to equipping traders with the knowledge to trade futures responsibly and safely. US traders can access these crypto futures contracts through the Coinbase Advanced platform, which provides a seamless and user-friendly interface.
To get started, traders need to have an existing account on Coinbase Inc. for spot trading and then apply to trade futures with Coinbase Financial Markets. All futures contracts are settled in USD for ease of use.
While the initial rollout is web-based, CFM plans to make futures trading accessible through the exchange mobile app in the near future, further expanding its reach in the US market.
The introduction of regulated crypto futures contracts in the United States represents a pivotal moment in CFM’s efforts to make futures trading more accessible to a broader spectrum of traders, empowering them with new opportunities in the crypto market.