8 months ago
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Crypto exchange Coinbase has announced its plan to launch futures trading products for Dogecoin, Litecoin, and Bitcoin Cash, potentially as early as April 1.
The latest move was detailed in three separate communications to the United States Commodity Futures Trading Commission (CFTC) on March 7. Through the initiative, Coinbase Derivatives aims to offer cash-settled futures contracts for these cryptocurrencies on its platform, possibly before obtaining formal approval from the CFTC.
The exchange plans to utilize a “self-certification” process, asserting that the futures contracts will comply with regulatory standards set by the agency. The approach allows for the listing of the Dogecoin futures contract for trading on or after April 1, 2024, as highlighted in one of the letters.
Following the announcement, on March 20, DOGE experienced a 16.1% uptick, BCH was up by 11.4%, and LTC increased by 7.8%, all surpassing the overall crypto market’s growth of 6.2% at the same time.
Currently, Coinbase Derivatives offers futures contracts for Bitcoin (BTC) and Ethereum (ETH) to both institutional and retail investors, along with contracts for crude oil.
The selection of these specific cryptocurrencies for futures contracts by Coinbase might hold deeper significance due to their shared foundational code with Bitcoin, now broadly acknowledged as a commodity by regulatory bodies.
James Seyffart, an ETF analyst at Bloomberg, reflected on the move, stating it could challenge the Securities and Exchange Commission (SEC) to clarify the distinction between securities and commodities beyond current justifications.
This is interesting… wonder if the SEC objects to these being classified 'commodities futures' vs 'securities futures'. These all forked from Bitcoin so "these are securities" claims would be hard to make after spot #Bitcoin ETF approvals. Might be why Coinbase chose them🤔 https://t.co/PRCxzQEYbi
— James Seyffart (@JSeyff) March 20, 2024Scott Johnsson, General Partner and General Counsel at Van Buren Capital, commented on the implications of Coinbase’s strategic move, envisioning it as the beginning of a broader trend and anticipating further applications in the wake of changes in US regulatory leadership.
Johnsson also highlighted that such futures listings might be a critical step toward the establishment of spot crypto ETFs.
The development comes in the backdrop of the SEC’s eventual approval of spot Bitcoin ETFs after a protracted legal confrontation with Grayscale.
A court ruling determined the SEC’s longstanding resistance to the ETFs as unfounded, paving the way for future approvals.
