crypto: Coinbase buys crypto futures exchanges and plans to sell derivatives in the United States

LONDON: Major cryptocurrency exchange Coinbase said it was buying a crypto futures exchange, FairX, as part of a move to bring crypto derivatives to traders in the United States.

FairX, which was launched last year, is the trading name of LMX Labs. It sells futures products and is regulated by the US Commodity Futures Trading Commission (CFTC).

Coinbase has said it wants to make regulated crypto derivatives trading accessible to retail and institutional customers.

“Developing a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock additional participation in the cryptoeconomy for retail and institutional investors,” he said. said Wednesday in a blog post.

Cryptocurrency derivatives trading has grown rapidly since institutional investors over the past 18 months began embracing digital coin trading, providing great opportunities for platforms that offer futures and options.

Crypto derivatives volumes totaled $3.3 trillion in November, according to UK research CryptoCompare, accounting for almost 55% of the total crypto market.

Crypto futures and options products, especially those offered by regulated platforms, are widely considered less risky than buying and selling spot trades.

This likely makes them more attractive to institutional investors looking to gain exposure to cryptocurrencies, many of whom balance the lure of quick gains with the lingering risks in the emerging industry.

The deal is expected to close in the first quarter, the company said.

Coinbase shares ended down 1% on Wednesday after posting their first day of net gains this year on Tuesday, hitting over $246, though they remain down about 39% since their April IPO. from last year.

The shares rose nearly 3% to $241.20 in premarket trading.

Shares of blockchain-related companies fell earlier this week as bitcoin slipped below $40,000. It remains well below the all-time high of $69,000 reached in November of last year.

(Reporting by Elizabeth Howcroft, Tom Wilson and Medha Singh; Editing by Saikat Chatterjee)