Another Cause for Celebration as Crypto Enthusiasts Rejoice over Coinbase Futures’ Green Light

In a significant regulatory triumph amidst a fervent standoff with the nation's securities regulator, the green light has been granted to Coinbase. This pivotal development marks a resounding victory as Coinbase secures the authority to introduce crypto futures to American retail clients rather than just institutional clients.

Just yesterday, the National Futures Association (NFA), duly recognised by the United States (US) commodities regulator as an accredited futures association, bestowed upon Coinbase the authorisation to establish and operate a Futures Commission Merchant (FCM) platform. This milestone achievement not only underscores Coinbase's pioneering position but also ushers in a new era of possibilities in the evolving landscape of digital asset trading.

Brian Armstrong took to X stating that it was a “major moment for crypto regulatory clarity in the US.”

So What’re Crypto Futures?

Cryptocurrency futures stand as contracts linking two investors in a speculative endeavour centred on the future value of a given cryptocurrency. This mechanism provides a pathway to harness the potential of specific cryptocurrencies without necessitating their direct acquisition.

Much akin to conventional futures contracts applied in commodities or equities trading, these crypto futures extend the opportunity to project and engage with the price evolution of the underlying digital asset. By partaking in this avenue, investors are enabled to navigate the intricate terrain of cryptocurrency valuation with a calculated stance.

Crypto Community Reacts with Cheers and Memes

Just when we think Ripple’s win last month was the only cause for celebration, Coinbase scored a touchdown, figuratively, with the approval to offer crypto futures.

Astute industry observers are perceiving this approval as a pronounced regulatory triumph, casting a spotlight on Coinbase and the broader crypto sphere. This perspective gains weight considering the backdrop of the US Securities and Exchange Commission's (SEC) allegations, contending that the exchange had adeptly circumvented the requisite registration for its offerings.

Electric Capital founder Avichal Garg posted on X that, “If I were a judge I'd wonder why somehow [Coinbase] manages to register with the [CFTC] yet the [SEC] claims that Coinbase is unwilling to do the hard work to register.”

Former CFTC Commissioner Brian Quintenz also added that, “Coinbase has consistently demonstrated its dedication to regulatory compliance, and here is another strong example.”

Even ChainGPT jumped on the congratulatory bandwagon.

X was awash with victory memes and whatnot.

An analyst at Mizuho Securities, Dan Dolev, said, “Since the global crypto derivatives market can be three to four times larger than spot, this approval increases Coinbase’s total addressable market.”

While Jeff Sekinger from Orca Capital pointed out that, “Coinbase is set to become a pivotal access point for traders.”

#Coinbase is now the first crypto-native leader to provide both traditional spot crypto trading and regulated, leveraged crypto futures to eligible clients. A major milestone in the ever-evolving crypto landscape that brings its traders more opportunities in the markets.
— Jeff Sekinger (@JeffSekinger) August 16, 2023
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Meltem Demirors, CoinShares Chief Strategy Officer, expressed that it was “exciting times in US crypto markets.”

Critical Milestone Unlocked

With this win, Coinbase has now ascended to a position traditionally occupied by stalwarts of the financial establishment. This transformative shift has been characterised by Coinbase as a "critical milestone," a designation that resonates powerfully as it heralds a distinctive feat: the distinction of being the pioneering crypto-native entity to seamlessly integrate both classic spot crypto trading and the realm of futures products. As of now, the exchange did not specify when it would become available.