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- Coinbase Derivatives has applied to the CFTC to list Shiba Inu futures and plans to launch by July 15.
- The exchange is also seeking approval for future contracts with Polkadot, Stellar, Chainlink, and Avalanche.
Coinbase Derivatives has applied to the Commodity Futures Trading Commission (CFTC) to list futures contracts for Shiba Inu (SHIB) on its platform. According to the application dated June 28, 2024, the exchange plans to have the futures contract listed by July 15, pending approval.
Alongside Shiba Inu, Coinbase has also applied to list futures contracts for Polkadot (DOT), Stellar (XLM), Chainlink (LINK), and Avalanche (AVAX). If approved, the number of regulated crypto futures on Coinbase will increase to eight, broadening the range of investment opportunities available to traders on the platform.
The Shiba Inu futures contract is set to be a monthly cash-settled and margined contract, sized at 10 million SHIB per contract. Due to Shiba Inu’s current price and supply, the minimum tick size and tick value are set at $0.00001 per SHIB and $0.10 per contract, respectively. Shiba Inu will join Dogecoin (DOGE) as another memecoin with a regulated futures contract, highlighting the growing acceptance and integration of memecoins in the regulated financial markets.
Managing Volatility in Crypto Futures
Coinbase acknowledged the volatility of Shiba Inu due to its low market cap and memecoin status but emphasized its experience in managing high-volatility environments. The exchange cited successful volatility management in existing commodity contracts, such as Bitcoin and oil, as evidence of its capability to handle the fluctuations expected with Shiba Inu futures.
The application asserts that the futures contract will comply with all core principles outlined in the Commodity Exchange Act (CEA), ensuring it is not readily subject to manipulation and does not disrupt the market. The maximum number of positions allowed in the contract is limited to 30,000, providing a safeguard against excessive speculation.
Self-Certification Strategy for Futures Listing
Coinbase is utilizing the CFTC Regulation 40.2(a) self-certification process for this application. This strategy allows designated contract markets (DCMs) like Coinbase Derivatives to list new products without the CFTC’s direct vetting, provided they comply with the CEA and CFTC regulations. By adopting this approach, Coinbase aims to streamline the process of bringing new futures contracts to market.
The self-certification strategy has proven effective for Coinbase in the past. The exchange rebranded to Coinbase Derivatives in 2022 after acquiring FairX and received approval from the National Futures Association in 2023. This history of successful regulatory navigation positions Coinbase well for the approval of its new futures contracts.
Coinbase Derivatives is set to become the first futures exchange in the US to introduce CFTC-regulated margined futures contracts for AVA, LINK, DOT, XLM, and SHB. This development provides participants and their clients with more access points, allowing for better risk management and speculation on price movements with reduced upfront capital requirements.
Shiba Inu (SHIB) has seen a significant surge in the last 24 hours, rising by 15%. This sharp increase follows a recent dip, where SHIB found support at $0.0000127 before rebounding to $0.00001538.
The recent uptick in SHIB’s price has been driven by increased activity from large holders, known as “whales.” Data from IntoTheBlock shows a 197% inflow surge, contributing to the price boost and reflecting improved market sentiment.
