Table of Contents
- Coinbase introduces perpetual futures contracts, enhancing trading flexibility and leverage for non-US regions.
- Coinbase expands its operations across Europe, aiming to operate throughout the European Union after the Markets in Crypto-Assets bill goes live in 2024.
- Recent geopolitical conflicts in the Middle East raise uncertainty about anti-crypto legislation, impacting trading volumes and market dynamics.
Coinbase and German Market Entry
Coinbase, one of the world’s leading cryptocurrency exchanges, is on a journey that promises to reshape the global crypto landscape.
In a move designed to empower its users, Coinbase has introduced perpetual futures contracts and overseas expansion plans, amidst legal challenges.
Coinbase opens the door to new trading for its Coinbase Advance clients in non-US regions. The main event is the perpetual futures contracts, or ‘perps’ for short.
These financial instruments are designed to provide traders with greater flexibility and leverage in the crypto market.
With Perps, users can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and XRP contracts and settle them in USDC, a stablecoin pegged to the US dollar.
Additionally, Coinbase is offering up to 5x leverage for most contracts (3x for XRP), which means traders can multiply their positions and potentially amplify their gains.
Coinbase is making trading more accessible and efficient through a user-friendly web interface and application programming interfaces (APIs).
These tools allow traders to navigate cryptocurrencies while also enabling the automation of their trades.
These features can be game-changers in the fast-paced crypto market. Additionally, Coinbase is introducing a competitive fee structure. Makers will enjoy a 0% fee, while takers will only pay a modest 0.03% fee.
This attractive fee setup can further encourage trading activity on the platform.
Coinbase is not only focused on trading; the company has established a regional office in Germany and is actively engaging with the crypto community there.
This initiative follows a successful Base developer symposium in Berlin, underscoring Coinbase’s commitment to developing the next generation of crypto innovators and leaders.
Furthermore, Coinbase is looking to expand its operations across Europe. Leveraging its existing BaFin license, the exchange is gearing up to operate throughout the European Union once the Markets in Crypto-Assets bill becomes live in 2024.
But the company’s ambitions don’t stop there; they aim to broaden their presence in countries like Ireland, Benelux, the Nordics, Spain, and Italy.
Currently, FTX proposes customer fund return plan, potentially returning up to 90% of funds. Read here.
Challenges and Opportunities in Coinbase’s Path
Coinbase’s latest product offerings and expansion plans come at a pivotal moment for the crypto industry.
Recent geopolitical conflicts in the Middle East have cast uncertainty over the passage of anti-crypto legislation aimed at combating money laundering.
This uncertainty could further impact trading volumes and market dynamics.
Additionally, Coinbase experienced a significant setback when its trading volume dropped by 50% in the third quarter, marking the lowest level since Q3 2020.
This decline can be attributed to the impact of a bear market initiated by the collapse of the algorithmic stablecoin TerraUSD.
Coinbase also faced legal challenges in the United States, with the Securities and Exchange Commission (SEC) accusing the exchange of running an unregistered brokerage and offering unregistered securities.
In response, Coinbase has laid out its defense by invoking the “major questions doctrine,” arguing that federal agencies like the SEC should not create regulations for matters of significant economic and political importance.
The crypto market is known for its price swings, and investors must be ready for such turbulence.
Coinbase’s introduction of perpetual futures contracts offers the potential for higher gains but also carries risks.
Currently, the open interest in Bitcoin futures is quite high at 287 BTC, making the market susceptible to significant price fluctuations that could trigger substantial liquidations in both directions.
Amid these challenges and uncertainties, the crypto community is eagerly anticipating a pivotal event that could reshape the market: the approval of US spot Bitcoin exchange-traded funds (ETFs).
Enhance Your Crypto Trading Skills With Our Legends’ Trading Masterclass
Empower your crypto trading skills with our Legends Masterclass. Sign up now and take advantage of our limited-time discount offer! Join the class today.
These ETFs, if given the green light, would offer traditional investors a new level of accessibility to the crypto world. Furthermore, cryptocurrency is gearing up for the fourth Bitcoin halving event, slated for spring 2024.
Historically, Bitcoin halvings have had a significant impact on crypto prices, both before and after the event.
