On January 13th, Coinbase announced the acquisition of FairX, a CFTC-approved derivatives exchange.
The move, according to the business, would allow it to provide crypto derivatives to American consumers.
“The acquisition is a key stepping stone on Coinbase’s path to offer crypto derivatives to retail and institutional customers in the US.”
Derivatives are financial contracts whose value is based on the value of an underlying asset, such as Bitcoin or Ethereum in this example. Futures, options, swaps, and perpetual contracts for crypto assets are examples.
Coinbase is attempting to enter a crowded market.
The startup intends to compete with the FTX derivatives exchange in the United States, which has developed as a significant competitor in the last year. FTX handled $74 million in derivatives volume in the last 24 hours, according to CoinGecko.
With a daily futures volume of $768 million, Binance is the world’s top derivatives exchange. Over the last 24 hours, the total volume for all 59 derivatives exchanges featured on the platform was $129 billion.
Coinbase has announced that it intends to bring regulated crypto derivatives to market through FairX’s current partner ecosystem. The new products will first be offered to a limited number of Coinbase customers, but the company aims to extend to “all Coinbase customers in the US” in the future.
Coinbase remarked, “Deep and liquid derivatives markets are fundamental to the operation of traditional financial markets,” before adding, “These products are in significant demand.” The establishment of a transparent derivatives market is a “vital inflection moment for every asset class,” according to the business, before adding:
“We believe it will unlock further participation in the cryptoeconomy for retail and institutional investors alike.”
COIN Price Analysis
Over the last 24 hours, Coinbase stock has decreased marginally from an intraday high of $244 to an after-hours price of $234. According to FXempire, COIN has lost 6.7% from the beginning of the year and is presently down 33% from its all-time high of $351 on November 8.
The decline is similar to that of the whole crypto market, which has lost about 30% of its total market value since its all-time high of just over $3 trillion in November. Crypto markets have recovered a little today, rising 3.3% in the last 24 hours to reach a total market size of $2.2 trillion.
At the time of writing, Binance Coin (BNB), Solana (SOL), Cardano (ADA), and Terra (LUNA) are leading the gains.