- Analysts at investment bank JMP Securities have said that an approval received by Coinbase to offer crypto futures trading can be taken as evidence of crypto’s resilience in the US.
- The JMP Securities analysts believe this approval strengthens Coinbase’s position in its ongoing legal battle with the SEC.
- The potential revenue from the new futures trading business could grow to “hundreds of millions of dollars over the first two years, and may even rival spot trading business over the longer-term.
Coinbase Approved to Offer Crypto Futures Trading
Coinbase has been approved by the National Futures Association to operate a marketplace for futures contracts in the US. This allows them to take on the role of introducing futures contracts for two major cryptocurrencies: Bitcoin (BTC) and Ether (ETH).
Crypto’s Resilience in US
Analysts at investment bank JMP Securities have said that this approval is evidence of crypto’s resilience in the US. It adds validation to domestic crypto sector in the US, and is a step on way countering a narrative that American crypto industry is being pushed offshore.
Strengthening Coinbase’s Position Against SEC
The JMP Securities analysts also said this approval strengthens Coinbase’s position in its ongoing legal battle with the Securities and Exchange Commission (SEC). They believe it will form a regulatory moat for Coinbase which will become even more apparent as time passes.
Potential Revenues from Futures Trading Business
Evaluating potential impact on Coinbase’s financial performance, it was estimated that revenue from new futures trading business could grow to “hundreds of millions of dollars over first two years.” Over long-term, it may even rival spot trading business. However, proper education about cryptocurrency needs to be provided and scale activity across retail platform before this can happen.
“Coinbase’s Derivatives Approval Shows Crypto’s Resilience in the US,” according to analysts at investment bank JMP Securities. The approval provides validation for domestic crypto sector in US and strengthens Coinbase’s position against SEC. It is expected that revenues from new futures trading business could grow significantly over short-term, and potentially rival spot trading business over long-term.