Coinbase Discovers Record-Breaking Volumes for Its Future “Nano” Product

In June, Coinbase introduced its micro bitcoin futures product.

The 1/100-bit cash-settled bitcoin futures contract is traded at several retail brokers, including Wedbush, EdgeClear, and NinjaTrader.

Coinbase Derivatives Exchange head Boris Ilyesky noted at the time of the product launch that it “requires less upfront cash than traditional futures products and real potential for significantly increasing customer participation in the US-regulated cryptocurrency futures markets.” offers.

Spot trading volume on Coinbase has declined dramatically, falling from $200 billion in May 2021 to $59 billion in July. Although the product of its “nano” bitcoin futures, whose volume hit records three days in a row last week, is seeing an onslaught of new retailers.

After many days of growth, notional volume for nano futures reached 217,045 on July 19; However, according to Bloomberg data, contract size fell to 117,493 on July 22. In June and July, volumes were mostly below 50,000 contracts traded per day.

According to an email from Coinbase’s sales team, the company has seen “a surge in activity since retail brokerage partners began marketing/promotional activity last week.” Coinbase entered the cryptocurrency futures market earlier this year after buying FairX, a derivatives marketplace controlled by the Commodity Futures Trading Commission.

With companies like FTX and CME Group trading tens of billions of dollars in Bitcoin futures every month, it faces stiff competition.

Introducing FairX

Originally known as FairX, Coinbase Derivatives Exchange, which was acquired by Coinbase in January this year, will launch its first listed cryptocurrency derivatives product.

The so-called “nano” bitcoin futures contract will trade under the ticker BIT on June 27, according to a blog post written on Friday. Each contract has a size equal to one tenth of a bitcoin and is settled in cash, more specifically in US dollars.

It is interesting that the BIT contracts are initially only traded through independent brokers and clearing companies.

In order to offer margin futures contracts directly to its customers and consumers, Coinbase is now awaiting approval from the Commodity Futures and Exchange Commission to license its own Futures Commission Merchant (FCM).

Steve Anderson
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