Four months after Coinbase Financial Markets (CFM) received approval to operate as a futures commission merchant (FCM) entity, Coinbase Advanced allows retail traders in the United States to obtain regulated cryptocurrency futures contracts.
On August 17, CFM received regulatory approval from the National Futures Association (NFA), a self-regulatory organization designated by the Commodity Futures Trading Commission, to operate FCM and provide cryptocurrency futures services to qualified U.S. traders.
In details shared with Cointelegraph, CFM revealed that Coinbase Advanced customers in the United States can trade nanoscale futures contracts in sizes 1/100 of 1 Bitcoin (BTC) and 1/10 of 1 Ethereum (ETH) . As CFM CEO Andrew Sears explains:
“These contracts have lower upfront capital requirements, making them an affordable investment option for a wider range of retail customers.”
NanoEthereum contracts allow participants to manage risk, trade on margin or speculate on Ethereum prices. Nanobitcoin contracts allow users to bet on the future price of BTC.
In addition to offering regulated, leveraged and cash-settled cryptocurrency futures, users can access a library of educational content through Coinbase Learn. US residents with an active Coinbase spot trading account are eligible to open an FCM futures account.
The service is available on the web and will soon be available on mobile devices.
related: Coinbase quashes rumors of weekly Bitcoin withdrawal limits
Coinbase’s decision to launch a cryptocurrency futures service seems natural, as the exchange’s spot trading volume has dropped significantly this year compared to 2022.
Analysis by digital asset data provider CCData shows that Coinbase’s spot trading volume is approximately $76 billion, with spot trading volume in the third quarter of 2023 falling 52% compared to the same period in 2022.
Despite falling spot trading volumes, Coinbase gained market share last quarter as cryptocurrency exchange Binance came under greater scrutiny from regulators.
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