Coinbase Announces Futures Trading Expansion for Dogecoin, Litecoin, and Bitcoin Cash
Cryptocurrency exchange Coinbase has announced plans to launch futures trading products for Dogecoin, Litecoin, and Bitcoin Cash as early as April 1.
The latest moves were detailed in three separate communications sent to the U.S. Commodity Futures Trading Commission (CFTC) on March 7. With this initiative, Coinbase Derivatives aims to offer cash-settled futures contracts for these cryptocurrencies on its platform before they receive official approval. From CFTC.
The exchange plans to utilize a ‘self-certification’ process, where it asserts that futures contracts comply with regulatory standards set by the institution. This approach would allow for the listing of Dogecoin futures contracts for trading after April 1, 2024, as highlighted in one of the letters.
After the announcement, on March 20th, DOGE rose 16.1%, BCH rose 11.4%, and LTC rose 7.8%, simultaneously exceeding the overall cryptocurrency market growth rate of 6.2%.
Coinbase Derivatives currently offers Bitcoin (BTC) and Ethereum (ETH) futures contracts to both institutional and retail investors, along with crude oil contracts.
Coinbase’s selection of these specific cryptocurrencies for futures contracts could have greater significance due to their shared underlying code with Bitcoin, which is now widely recognized by regulators as a commodity.
James Seyffart, ETF analyst at Bloomberg, echoed this move and said it could challenge the Securities and Exchange Commission (SEC) to clarify the distinction between securities and commodities beyond the current justification.
Commenting on the impact of Coinbase’s strategic move, Scott Johnsson, general partner and general counsel at Van Buren Capital, envisions it as the start of a broader trend and expects further adoption following changes in U.S. regulatory leadership.
Johnsson also emphasized that listing these futures could be an important step towards establishing a spot cryptocurrency ETF.
This development comes against the backdrop of the SEC’s final approval of a spot Bitcoin ETF after a lengthy legal battle with Grayscale.
The court ruling determined that the SEC’s long-standing resistance to ETFs was unfounded, paving the way for future approval.