Source: Adobe / Rafael Henrique
Crypto exchange behemoth Coinbase announced Monday that will list two major altcoins on futures.
Coinbase officially announced on X (Twitter) that it “will add support for Solana (SOL) and Avalanche (AVAX) perpetual futures contracts.” The exchange will launch the futures support on Coinbase International Exchange & Coinbase Advanced.
Per the announcement, it will rollout SOL-PERP and AVAX-PERP markets on November 14, subject to liquidity conditions.
@CoinbaseIntExch will add support for Solana and Avalanche perpetual futures contracts on Coinbase International Exchange & Coinbase Advanced. The opening of our SOL-PERP and AVAX-PERP markets will begin on or around 4pm UTC on 14 November 2023, if liquidity conditions are met. pic.twitter.com/D2QTV9k9Qe
— Coinbase International Exchange (@CoinbaseIntExch) November 12, 2023
Perpetual futures are a type of derivative contract that allows traders to speculate on the underlying asset price movements, indefinitely. They offer several advantages to traders including arbitrage, leveraging and hedging opportunities. However, it also comes with disadvantages including over-leveraging, liquidation, and volatility.
Coinbase Advanced launched perpetual futures trading in October, for customers in eligible jurisdictions outside of the United States. It initially announced four perpetual contracts – Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Ripple (XRP).
Further, the contracts provide leverage of up to 5X, with Ripple offering up to 3X leverage. All perpetual futures contracts are settled in USD Coin (USDC) stablecoin.
“Coinbase complies with local regulations around crypto derivatives, thus perpetual futures trading on our Advanced Trading platform is only available to users in specific non-US regions,” the exchange notes.
In September, Coinbase International Exchange received regulatory approval from the Bermuda Monetary Authority, to offer perpetual futures for non-US customers.
Demand for Crypto Perpetual Futures
Perpetual futures in the crypto markets have become one of the most popular derivatives contracts recently, driving more demand.
According to data on Laevitas, as of November 10, the global centralized exchange (CEX) perpetual volume reached $195.3 billion. Coinbase competitor Binance captured the maximum volume, followed by OKX exchange.
Conor Ryder, research analyst at Kaiko, told Bloomberg that Bitcoin perpetuals-to-spot-volume ratio is at its highest in nearly two years. He added that perps, as they are called in industry jargon, “don’t expire and have been hugely popular with traders.”
Crypto exchange BitMEX first introduced the perpetual contract in 2016. Given the product’s simplicity, it originally captured retail traders, and many exchanges followed BitMEX with their own perpetual contracts.
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