Coinbase launches “institutional-sized” bitcoin and ether futures
The derivatives arm of US crypto exchange Coinbase will offer “institutional-sized” bitcoin (BTC) and ether (ETH) tracked futures for institutional clients starting June 5.
Coinbase Derivatives Exchange said these futures contracts are specifically designed to cater to the growing institutional demand in the market, building upon the success of its previously issued nano Bitcoin (BIT) and nano Ether (ETI) contracts introduced last year.
With the launch of these new futures offerings, Coinbase aims to further expand its institutional services and provide additional investment options for its clientele.
The prominent cryptocurrency exchange specified that the BTI (Bitcoin Tracked Index) and ETI (Ether Tracked Index) futures contracts are structured to represent 1 BTC and 10 ETH per contract, respectively. Based on current prices, the notional value of the BTI contract is approximately $30,000, while the ETI contract holds a notional value of around $20,000.
Coinbase added that the BTC and ETI futures contracts are available at “significantly lower fees” in comparison to traditional offerings. However, the exact fees for these contracts have not been disclosed.
Settled in U.S. dollars, on a monthly basis, these contracts enable professional investors to hedge their market positions, express long-term market views, or utilize them as components of more intricate trading strategies.
Derivatives, in the context of finance, are contractual agreements that derive their value from an underlying asset. In the cryptocurrency space, the derivatives market involves traders purchasing contracts based on the projected future price movements of digital assets. With these futures contracts, traders can participate in the price fluctuations of Bitcoin and Ethereum, allowing them to potentially profit from their predictions about the future value of these cryptocurrencies.