Coinbase Sets 10x Cap on Perpetual Futures Leverage

Coinbase International Exchange, the global branch of the U.S.-based crypto exchange Coinbase, has implemented a maximum leverage cap of 10x for its perpetual futures products.

Key Points:

1. Leverage Limit Announcement Coinbase limits perpetual futures leverage to 10x, affecting popular contracts like Bitcoin (BTC), Cardano (ADA), Ether (ETH), Litecoin (LTC), Solana (SOL), and XRP.
2. Market Impact BTC down to $42,616, ETH down to $2,371, LTC down to $75.80, SOL down to $100, and XRP down to $0.63. Traders at 10x leverage must maintain a $90,000 notional value across all contracts.
3. Trading Conditions Traders exceeding 10x leverage can still transact but are constrained by default initial margin (DIM) requirements. DIM ranges from 20% (5x leverage) to 40% (2.5x leverage) for Coinbase International perpetuals, depending on digital assets.
4. Risk Management Limits are regularly reviewed, considering order book depth, volumes, and stress testing against insurance fund balances. The goal is to offer optimal 10x leverage access while balancing systemic risks associated with higher leverage trading.

Background:

• Coinbase International obtained a class F license from the Bermuda Monetary Authority on Sept. 28, enabling the launch of perpetual futures trading for non-U.S. consumers in select countries.
• The exchange, introduced in Bermuda in May, praised Bermuda's regulatory environment for its transparency, compliance, and cooperation, following regulatory challenges faced by its U.S. parent company.

Coinbase International's move to cap perpetual futures leverage aligns with its commitment to responsible trading practices, providing transparency and managing risk for traders.

While aiming for optimal customer access, Coinbase International demonstrates a commitment to risk mitigation, a crucial aspect in the dynamic crypto market.