Popular crypto exchange Coinbase has recently acquired FairX Exchange, a regulated derivatives trading platform. With this acquisition, the exchange aims to provide derivatives market to their customers.
For those who don’t know, the derivatives market is the financial market for derivatives which includes instruments such as futures contracts or options. The following market consists of two options: exchange-traded derivatives and over-the-counter derivatives.
Coinbase announced this on Wednesday, detailing:
“Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through Fairx’s existing partner ecosystem. Over time, we plan to leverage Fairx’s infrastructure to offer crypto derivatives to all Coinbase customers in the US.”
Besides this, Coinbase added:
“We want to make the derivatives market more approachable for our millions of retail customers by delivering an easy-to-use user experience that Coinbase is known for.“
Talking about FairX, the Commodity Futures Trading Commission (CFTC) regulates the exchange as a derivatives trading platform.
Coinbase is expecting to close the deal in the first quarter. As of now, FairX will operate as a normal derivatives trading platform during this period.
The crypto exchange also notes that the liquid derivatives markets are becoming essential in the traditional markets. Moreover, they added:
“These products are in high demand from investors who seek to effectively manage risk, execute complex trading strategies, and gain exposure to crypto outside of existing spot markets.“
The acquisition will pave the way for Coinbase to offer crypto derivatives to retail and institutional customers in the U.S. The crypto exchange will initially bring the regulated crypto derivatives market via Fairx’s existing partner ecosystem.