Coinbase, America’s largest digital asset exchange, has gained approval to offer crypto futures to its U.S. customers.
This development is seen as a major regulatory victory amidst a heated standoff with the U.S. Securities and Exchange Commission (SEC), which accuses Coinbase of avoiding necessary registrations.
On the other hand, the National Futures Association (NFA) has greenlit Coinbase to operate a Futures Commission Merchant platform. This move is seen as a significant win for Coinbase and the crypto industry at large.
Observers, including Brian Quintenz, a former CFTC Commissioner, and Brian Armstrong, CEO of Coinbase, have hailed the approval. Armstrong called it a “major moment for crypto clarity” in the United States.
This move positions Coinbase alongside traditional finance firms, as it becomes the first crypto-native company to offer traditional spot crypto trading in tandem with futures products.
Regarding market potential, the global crypto derivatives market was valued at close to $3 trillion in May, per CoinGecko. This market represents around 75% of all trading volumes, indicating a massive opportunity for Coinbase.
Dan Dolev, an analyst at Mizuho Securities, noted that this approval could significantly increase Coinbase’s total addressable market.
While Coinbase’s plans to offer Bitcoin and Ethereum futures contracts to eligible U.S. retail customers were unveiled earlier for mid-2022, the timeline for availability remains unspecified.