Coinbase seems to be a common staple in our crypto coverage as of late. There’s a few good reasons: the $51 billion company is America’s biggest digital asset exchange. However, the best reason might be that what goes for Coinbase will likely go for other crypto players in the U.S. 💼
That’s why when the Securities Exchange Commission threatened to sue Coinbase over the launch of a new stablecoin-centric lending product, investors leaned in to listen. The U.S. regulator also asked for Coinbase to fork over the personal information of users who signed up to the program, which the company did not oblige.
It seemed that Coinbase might be prepared to fight the approaching litigation threat, especially since the company desires regulatory clarity. They even raised $2 billion through a bond sale last week, which would give them more than enough cash.
However, they might have found a better solution instead: getting into derivatives (and futures.)
Coinbase is seeking a National Futures Association membership, in a bid to take on other crypto derivatives players such as FTX and Binance. The offering will likely cater to more experienced traders.
Data from market data platform CryptoCompare shows that derivative volume actually exceeded spot volume for the first time. The derivatives volumes totaled $3.2 trillion, while total spot volumes were half a billion lower at $2.7 trillion during the period.
Given the popularity of derivatives trading, Coinbase’s anticipated next step might be an amicable next-step. However, the war of regulation-by-litigation might still await them after this brief detour. 📜