Major Cryptocurrency exchange Coinbase has acquired US-based CFTC-regulated derivatives exchange, FairX. According to the announcement, the acquisition will now allow Coinbase to offer crypto derivatives products in the US. Coinbase says it plans to utilize the infrastructure provided by FairX to provide crypto derivatives to all Coinbase customers in the U.S.
Coinbase To Enable More Participation In The Crypto Market
The crypto exchange added that developing the derivatives market will enable further participation in the crypto market because it’s an important inflection point for any market class. The plan is to offer more investment opportunities for both retail and institutional investors. The move is coming shortly after Coinbase applied for membership in the National Futures Association. The self-regulatory organization oversees derivatives platforms in the U.S
FairX was launched in May 2021 as a designated contract market (DCM). It is operating based on a license received from the Commodity Futures Trading Commission (CFTC) in late 2020. Although the platform is still relatively new in the industry compared to other more established firms, FairX has built a strong relationship with top brokerages such as Virtu Financial, ABN AMRO, Wedbush, E*Trade, and TD Ameritrade.
Coinbase Joins Crypto.Com To Offer Crypto Derivatives
This will be the second major crypto exchange acquisition deal within a month, following the acquisition of retail derivatives platform Nadex by Crypto.com at the end of last year. In August 2020, FTX.US bought LedgerX for a similar purpose of trading derivatives in the U.S.
Crypto.com recently started an ad campaign to promote its derivatives offerings after the acquisition of Nadex. The ad campaign features Matt Damon and airs in football games and movie theatres.
More Firms Interested In The Crypto Derivatives Business
Presently, only very few exchanges offer investors in the US the opportunity to trade Bitcoin and Ether futures. The most popular ad longest-available products in the market are cash-settled products. Coinbase expects the acquisition to close within its first fiscal quarter, while FairX will keep operating normally during the period.
More companies are showing interest in the crypto derivatives market as the sector keeps growing and expanding in adoption and popularity.