Coinbase bets on Canada crypto market with derivative contracts launch

Eligible Canadian investors can now access regulated derivative contracts on crypto exchange Coinbase. The company made the announcement on September 2, stating that traders now have a domestic CFTC-registered venue for crypto futures for the first time in the country.

The company stated that the rollout runs through Coinbase Financial Markets (CFM), a futures commission merchant registered with the U.S. Commodity Futures Trading Commission. 

Coinbase called itself the first major crypto-native platform to offer direct native crypto futures in the country.

The company stated that before now, Canadians wanting exposure to crypto-derivative products often turned to offshore or unregulated venues. 

What Canadian traders can actually trade on Coinbase

Eligible traders will get access to 23 perpetual and dated futures covering Bitcoin, Ether, and Solana. They will also get access to five commodity contracts, including gold, silver, and oil, and index products such as COIN50. 

The contracts are nano-sized, and the reason is to lower the upfront capital a trader needs, with leverage of up to 10 times.

The positions can be opened long or short. For a limited window, Coinbase is charging launch pricing of 0.02% per trade plus a flat 11 cents per contract. 

Coinbase put out the warning that leverage can cause losses to go well beyond an initial deposit and added that futures are not suitable for everyone.

Why is Coinbase making the case for hedging tools?

Coinbase cited the Bank of Canada, stating that one-third of publicly listed Canadian non-financial corporations already use derivatives to hedge their earnings.

On the global scene, crypto-derivative trading volume is around 4.4 times the size of the spot market, per Coinbase.

The derivatives launch is coming two days after Coinbase announced that it has expanded its partnership with Webull into Canada. The new arrangement will see it supply the custody and trading infrastructure behind Webull Canada’s crypto offering through its Crypto-as-a-Service platform.

Coinbase has been busy this year. In March, it rolled out futures to European traders in 26 countries. In July, it secured a MiFID license in the UK, and this clears the way for it to offer equities and derivatives in the country. 

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