Coinbase, a NASDAQ-listed cryptocurrency platform, announced on August 16 that it has received approval from the U.S. National Futures Association (NFA) to offer cryptocurrency futures to qualified U.S. customers.
In September 2021, Coinbase applied to the NFA to register as a Futures Commission Merchant (FCM). Nearly two years after the registration application, the NFA finally granted its approval, meaning Coinbase can now provide users with cryptocurrency derivatives directly.
With this approval, Coinbase is authorized to operate a Futures Commission Merchant (FCM) platform and can now offer Bitcoin and Ethereum futures contracts.
Research by CCData revealed that as of July, the global trading volume for crypto derivatives reached $1.85 trillion. Derivatives account for almost 80% of the entire crypto market, making them a vital component of cryptocurrency trading.
Greg Tusar, head of institutional products at Coinbase, indicated that offering regulated crypto products to U.S. customers marks a significant milestone. Under the supervision of the Commodity Futures Trading Commission (CFTC) and the NFA, Coinbase aims to provide these futures in a manner that safeguards consumers, reinforcing the U.S.'s position as a hub for digital innovation.
Possibly boosted by the positive news of the application approval, Coinbase's stock price surged to $84.5 in pre-market trading on August 16, up 6.72%. After the market opened, the stock climbed by 4.02%. However, it lacked momentum later in the day, closing at $79 per share, echoing the subdued sentiment in the broader cryptocurrency market.
According to the latest data from CoinMarketCap, Bitcoin dropped below $29,000, with its midday price hovering around $28,500 on August 16, showing a 2.06% decline in the past 24 hours and a 3.2% fall over the past week.
In early August, Coinbase released its Q2 2023 financial results ending in June. The report showed that Coinbase's total revenue for the second quarter stood at $707.9 million, a 12% decrease compared to $808.3 million in the same period the previous year. Coinbase projects that its subscription and service revenue will reach at least $300 million in the third quarter of this year.
While the Q2 revenue declined on paper and the company continued to operate at a loss, Coinbase's deficit has significantly reduced. In Q2, Coinbase reported a net loss of $97.405 million, compared to a net loss of $1.0937 billion in the same period last year. Basic loss per share was $0.42, compared to a loss of $4.95 the previous year. The diluted loss per share was also $0.42, down from $4.98 the year before. The adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $194 million, compared to a loss of $151 million in the same period the previous year.
On the regulatory front, Coinbase's ongoing tussle with the U.S. Securities and Exchange Commission (SEC) continues. In June, the SEC filed a lawsuit against Coinbase, accusing the company of operating illegally, conducting some business activities outside of regulatory oversight, and offering numerous unregistered crypto tokens.
