The Commodity Futures Trading Commission (CFTC) has granted Coinbase the approval to offer crypto perpetual futures, marking a significant milestone for the U.S. exchange. This development will enable Coinbase to connect its customers to the lucrative and risky offshore market for perpetual futures trading.
With this new green light, Coinbase is allowed to provide its users access to the global crypto perpetual futures market through Deribit, an offshore crypto options exchange that Coinbase acquired for $2.9 billion last year. Perpetual futures are unique derivatives that do not have an expiration date, allowing traders to engage in highly leveraged positions based on the anticipated future value of cryptocurrency assets.
Although details are still emerging, a source with knowledge of the situation indicated that Coinbase has not yet finalized which specific crypto assets will be available for perpetual futures trading. The CFTC has opened the door for the exchange to offer all “digital commodity” perpetual futures contracts that are traded on Deribit. This category includes a variety of cryptocurrencies such as Bitcoin, Ethereum, Solana, Dogecoin, and the TRUMP meme coin, among others. Coinbase will have the discretion to determine which of these assets are suitable for offering to U.S. customers within the context of perpetual futures.
The potential for profit in perpetual futures trading is considerable, as successful trades can yield multiple times the initial investment. However, it is important to understand the inherent risks—losing positions can be quickly liquidated or forcibly closed by exchanges, leading to significant financial losses. Last fall, extreme volatility in the crypto market resulted in the liquidation of approximately $19 billion in positions within a single day, largely due to the high levels of leverage employed by traders.
The CFTC has been hinting at introducing crypto perpetual futures in the United States for over a year. Despite their risk profile, the market for crypto perpetual futures is extraordinarily profitable; recent data from DeFi Llama reported a trading volume exceeding $588 billion in this market over the last month alone. By comparison, the entire decentralized finance (DeFi) ecosystem recorded only $160 billion in trading volume during the same timeframe.
Coinbase proactively reached out to the CFTC on Thursday, requesting a no-action letter—a document that assures them they won’t face regulatory action if they proceed with offering customers access to offshore crypto perpetuals. Within 24 hours, the CFTC issued a detailed, 16-page response that laid out new policies permitting Coinbase to engage in the requested activities.
In a parallel development, the CFTC also approved prediction market Kalshi to initiate its own Bitcoin perpetual futures, making it the first U.S.-based product of its kind.
While Coinbase stands as the first U.S. cryptocurrency exchange to receive formal approval for offering access to the global crypto perpetual futures market, it is anticipated that other exchanges will soon follow suit, leveraging the guidelines established in the CFTC’s recent no-action letter.
