Coinbase crypto futures for retail US traders goes live, includes 'nano' bitcoin trading

After securing regulatory approval, Coinbase's service offering crypto futures trading to eligible retail U.S. customers is now active and includes "nano" bitcoin contracts, the company said in a statement.

Through Coinbase Financial Markets, or CFM, the largest cryptocurrency exchange in the U.S. aims to provide leveraged crypto futures contracts trading to customers.

"Customers in the U.S. can now access regulated crypto futures contracts," the company said in a statement. "These futures contracts are specifically sized for retail traders, at 1/100th of a Bitcoin and 1/10th of an Ethereum."

In August, Coinbase announced it had obtained regulatory approval from the National Futures Association, a self-regulatory organization designated by the Commodity Futures Trading Commission, to operate as a futures commission merchant. At the time, Coinbase said that the global crypto derivatives market represents roughly 75% of crypto trading volume worldwide and is a critical trader access point. 

While the new service adds trading optionality, Coinbase pointed out that there is greater downside risk with futures trading.

"Futures provide traders with the ability to hedge their risk, diversify their portfolios, trade with leverage, and speculate on which way the market will go, either up or down," the company said. "Leverage in futures trading can work for you or against you. The risk of loss using leverage can exceed your initial investment amount."

All futures contracts will be settled in U.S. dollars, the company said.

Institutional services

Last year, the company created the Coinbase Derivatives Exchange after acquiring FairX, a CFTC-regulated futures exchange. The platform, open to third-party brokers, FCMs and market makers, in June launched new bitcoin and ether futures contracts tailored for institutional clients.

Coinbase's attempts to expand its business operations and service more customers comes as the crypto trading platform is engaged in a long-running regulatory battle with the Securities and Exchange Commission. Earlier this year, the regulator charged Coinbase for not registering as a securities exchange, broker and clearing agency.

The cryptocurrency exchange has argued that the agency's authority is limited to securities transactions.