Explore New Horizons With Coinbase Pre-Launch Crypto Futures

Navigate the Next Big Thing in Crypto with Coinbase Pre-Launch Market

Coinbase International has launched a new feature, enhancing its platform by allowing users to trade futures on tokens and coins before they are officially listed on the exchange. This innovation places Coinbase in direct competition with other leading centralized exchanges such as Binance, Bybit, Bitget, and OKX which have also introduced launchpads for emerging crypto projects. 

What's Coming?

The pre-launch markets on Coinbase enable users to engage in perpetual futures contracts on tokens that are yet to be launched. These instruments will convert to standard perpetual contracts once the underlying tokens are launched on applicable spot exchanges. 

This feature will be accessible to institutional investors through Coinbase International and to retail traders via Coinbase Advanced. The initial margin requirements are set at 50%, offering up to 2x leverage with a notional position limit of $50,000 per token.

Pre-launch markets introduce a unique mechanism for determining the index price. Instead of traditional methods, they use a 4-hour exponential moving average (EMA) of the instrument’s mark prices to establish the Pre-Launch Index Price. This approach aims to provide a more stable pricing structure during the pre-launch phase.

How It Will Impact the Crypto Industry?

The introduction of pre-launch markets by Coinbase International is poised to make significant waves in the crypto industry. For traders, this creates a new way to get exposure to tokens before they are available to the general public. 

By providing the possibility to speculate on the future value of these assets, Coinbase is providing a tool that might be interesting for both institutional and retail investors who are interested in early-stage investments.

However, Coinbase has been very transparent about the fact that these markets are highly risky. Pre-launch markets are usually characterized by low liquidity, high volatility, and a greater likelihood of liquidation. 

Furthermore, these instruments are not included in Coinbase’s Liquidity Support Program, which is also a concern for traders. The fact that underlying tokens may never be launched also presents a major risk because it may result in the freezing or removal of the pre-launch market.

Conclusion

As per CoinGabbar, the decision of Coinbase International to enter the sphere of pre-launch markets is a significant step in the development of the company’s services and its attempts to remain relevant in the context of the constant development of the cryptosphere. This new feature of trading soon-to-be-listed tokens presents new opportunities for traders but it also presents new risks that investors should be aware of. Established in May 2023, Coinbase International is expanding its international operations and services based on the Class F license from the Bermuda Monetary Authority. Such features will probably be critical in defining the future of the crypto industry as it evolves with time.

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