Coinbase is rolling out perpetual futures (perps) to Coinbase Advance clients in non-US jurisdictions. The company will settle Bitcoin (BTC), Ethereum (ETH), Litcoin (LTC), and XRP contracts in USDC and offer 5x leverage (3x for XRP).
Traders can trade derivatives and crypto from one web interface and use application programming interfaces (APIs) to automate trades. Initially, Coinbase will charge a 0% maker and a 0.03% taker fee.
Coinbase Expands as US Struggles Continue
The exchange simultaneously launched a new initiative to nurture crypto talent from its regional office in Germany. The move follows a positive response to a Base developer symposium it held in Berlin recently.
Coinbase’s current BaFin license would allow it to operate across the European Union when the new Markets in Crypto-Assets bill goes live in 2024. It has plans to broaden operations in Ireland, Benelux and Nordics, Spain, and Italy.
The aggressive overseas expansion comes as the exchange recorded a 50% annual decline in trading volume in Q3. The number is the lowest since Q3 2020 and reflects the effects of a deep bear market that started with the collapse of algorithmic stablecoin TerraUSD.
Coinbase recently expanded its Singapore operations and secured a license with the Bermuda Monetary Authority following legal challenges in the US. The US Securities and Exchange Commission (SEC) has accused the largest American exchange of running an unregistered brokerage and offering unregistered securities.
The SEC also asserted that Coinbase chose to list coins that it deemed high risk with its own internal framework. Coinbase charted its defense using the so-called major questions doctrine, a Supreme Court principle arguing that the US Congress will not allow federal agencies like the SEC powers to develop regulations for matters of significant economic and political importance.
Futures Traders May Need to Tread Cautiously
Coinbase’s new products come at a tricky time for the crypto industry. The recent conflict in the Middle East could put the skids on the passage of anti-crypto legislation aimed at combating money laundering, which could further hurt exchange volumes.
Investors betting heavily on futures during the bear market can be hurt by dramatic crypto price movements. Open interest in Bitcoin futures is currently elevated at 287 BTC, meaning that significant price breakouts could cause massive liquidations in both directions.
Industry experts expect the approval of US spot Bitcoin exchange-traded funds to be the next market-moving event. Crypto prices have also rallied before and after Bitcoin halvings, the fourth of which will occur in spring 2024.
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