Starting on November 14, Coinbase expands the futures market with perpetual contracts for SOL and AVAX, thereby expanding the options for trading cryptocurrencies.
A significant participant in the crypto exchange market, Coinbase, has recently declared an enlargement of the futures trading options it provides.
The platform will introduce perpetual futures contracts for Solana (SOL) and Avalanche (AVAX) on November 14.
By expanding its derivative market capabilities, Coinbase intends to offer traders greater choices in the swiftly changing cryptocurrency industry.
Coinbase Introduces Perpetual Contracts to Its Offerings
Subject to liquidity conditions, the forthcoming SOL-PERP and AVAX-PERP markets are scheduled to debut on the Coinbase International Exchange and Coinbase Advanced.
In contrast to conventional futures, perpetual futures lack an expiration date, enabling traders to speculate about underlying asset price fluctuations.
Due to this adaptability, arbitrage, hedging, and leverage are all feasible strategies, all of which are critical instruments for investors operating in the volatile cryptocurrency market.
However, these contracts also entail risks such as excessive leverage and liquidation, which require investors to exercise caution in their management.
Coinbase prioritizes adherence to regional regulations pertaining to crypto derivatives.
As a result, access to perpetual futures trading on the Advanced Trading platform is restricted to users residing in specific non-US regions.
The regulatory approval granted by the Bermuda Monetary Authority to Coinbase International Exchange in September serves to emphasize this adherence to regulations further.
At the outset, the platform provided four perpetual contracts encompassing Ripple (XRP), Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), each with a maximum leverage of 5X, except for Ripple, which is limited to a 3X leverage.
The utilization of the USD Coin (USDC) stablecoin to resolve all contracts provides an additional level of transactional stability.
Perpetual Futures Increase in Crypto Trading
The implementation of perpetual futures in crypto markets has generated increasing attention and desire.
According to data obtained from Laevitas, the perpetual volume of the global centralized exchange (CEX) had amounted to an astounding $195.3 billion as of November 10.
This development signifies traders’ growing fascination with perpetual contracts, as competitors of Coinbase, such as Binance and OKX exchange, have also amassed substantial volumes in this domain.
Research analyst at Kaiko Conor Ryder emphasized the increasing prevalence of these contracts, stating that the ratio of Bitcoin perpetual-to-spot volume is at its greatest level in almost two years.
