Coinbase, a leading cryptocurrency exchange, has revealed its intention to introduce futures trading options for Dogecoin, Litecoin, and Bitcoin Cash, potentially commencing by April 1.
The announcement, made through separate communications to the United States Commodity Futures Trading Commission (CFTC) on March 7, outlines Coinbase Derivatives’ plan to offer cash-settled futures contracts for these cryptocurrencies on its platform. Despite the absence of formal approval from the CFTC, Coinbase plans to utilize a “self-certification” process, assuring compliance with regulatory standards set by the agency. This approach aims to enable the listing of Dogecoin futures contracts for trading starting April 1, 2024, as indicated in one of the communications.
Following this announcement, on March 20, Dogecoin saw a surge of 16.1%, Bitcoin Cash rose by 11.4%, and Litecoin increased by 7.8%, outpacing the overall crypto market’s growth of 6.2% during the same period.
Coinbase Derivatives currently 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 particular cryptocurrencies for futures contracts by Coinbase may carry significance due to their shared foundational code with Bitcoin, which is widely recognized as a commodity by regulatory authorities.
James Seyffart, an ETF analyst at Bloomberg, believes that Coinbase’s move could prompt the Securities and Exchange Commission (SEC) to clarify the distinction between securities and commodities beyond existing justifications. Scott Johnsson, General Partner and General Counsel at Van Buren Capital, sees Coinbase’s strategic move as the beginning of a broader trend, anticipating further applications in response to changes in US regulatory leadership. Johnsson also suggests that such futures listings could play a crucial role in the establishment of spot crypto ETFs.
This development occurs against the backdrop of the SEC’s recent approval of spot Bitcoin ETFs following a lengthy legal battle with Grayscale. A court ruling deemed the SEC’s resistance to the ETFs unfounded, potentially paving the way for future approvals.