Coinbase hails arrival of ‘perpetual-style’ futures in US

The firm on Monday listed small-sized “nano” contracts on cryptocurrencies bitcoin and ether with a lot size of 0.01 bitcoin and 0.10 ether. The contracts, which have a time horizon of five years and are available to trade 24 hours a day, seven days a week (24/7), are designed to replicate popular perpetual contracts traded on offshore crypto exchanges by offering up to 10 times leverage.

“US perpetual-style futures are now live on Coinbase Derivatives – and we’re launching them at a time of record growth,” Boris Ilevsky, head of Coinbase Derivatives Exchange, said in a post on Monday. “We’ve officially surpassed $1 billion (£741m) in open interest – a key milestone for our US derivatives exchange and a clear sign of the momentum and strong demand for futures trading.

“With 24/7 trading, built-in futures margin, and spot price tracking via a funding rate mechanism, this product suite is the first of its kind in the US, filling a critical gap in the domestic derivatives market.”

Coinbase, which already trades cryptocurrency spot and futures as well as a handful of commodity contracts, hit in June a monthly record of 11.3 million lots, according to FOW data, beating the previous high of 10.5 million lots in February.

“For years, US crypto traders have looked on as their international counterparts utilised one of the most popular tools in the digital asset marketplace: perpetual futures,” Coinbase said in a post on its website. "These innovative derivatives, offering higher leverage while eliminating the need to navigate monthly expiration dates, dominate 90% of global crypto trading volumes. Due to a complex regulatory landscape, they remained just out of reach for traders in the United States. Until now.”

Physical crypto exchange Bitnomial listed in April the first US-regulated perpetual futures contracts, according to FOW Data, after announcing it had self-certified the products under CFTC rules. The contracts saw two lots traded in May and none in June, according to FOW data.

CME Group, the largest traditionally regulated listed crypto market, earlier this month launched its version of perpetual contracts referencing crypto and equity indices, called spot-quoted futures.

Firms in May flagged concerns about the “self-certification” process that allows regulated firms to list new products such as perpetual contracts.

Coinbase in May added Solana and Ripple Labs (XRP) coins to its 24/7 service and confirmed plans to launch equity index futures.