Fresh From The Oven: Main Street America Dips Into The Crypto Futures Cookie Jar

Main Street’s got a new playground, and it’s not your grandpa’s stock market. Yep, the good ol’ everyday Joe and Jane Bitcoin enthusiasts in the US have hit the jackpot. They’ve got their mitts on a brand-spankin’-new cryptocurrency exchange. And guess who’s behind this shiny new toy? None other than Coinbase Global! Hot off the press from August 16, they’ve scored a thumbs-up to throw crypto futures into the mix for the average American shopper.

Hold onto your hats, though; we’re just revving the engines. Word on the street is this new move could sprinkle some magic dust on a sleepy $2 trillion crypto derivatives market. It’s like waking a sleeping giant, folks!

Lucas Kiely, the big brain at Yield App, chimed in saying, “Coinbase getting the green light for US futures? Well, that might just be the shot of espresso the market’s been yearning for.”

But here’s the twist. Bitcoin’s been snoozing like a teenager on a weekend morning, with all the drama from central banks and a couple of hiccups from crypto exchanges like FTX and Binance. And, if we’re being real, the big players in the game haven’t been too keen to roll the dice lately. Economic clouds on the horizon, regulatory mazes, and a less-than-thrilling market have kept big bets on the backburner.

Now, sure, US retail traders have been trading bitcoin left and right on places like Bitstamp and Coinbase. They’ve even dabbled in some fancy options on the CME, though they’ve needed a middleman. And who could forget the allure of the Bitcoin ETFs, brought to you by the likes of ProShares and VanEck?

But here’s the kicker: Coinbase’s latest move is buzzing louder than a beehive in summer. Imagine a swarm of retail traders, fueled by meme magic and social media frenzy, diving headfirst into the crypto pool. Exciting times, ain’t it?

Now, Todd Groth from CoinDesk Indices tapped the brakes a bit, saying, “Let’s not count our chickens before they hatch. How Coinbase plays this out? Well, that’s the million-dollar question.”

A Brief Look-Back

For a quick trip down memory lane, options and futures have been the rockstars of crypto trading since around 2014. Folks have been jazzed about placing their bets on Bitcoin’s wild rollercoaster ride. And let’s not forget the big fish in the pond. They’ve been cruising steady, with a smidge of growth here and there.

But, and it’s a big but, trading volumes have hit a bit of a dry spell. In July, we saw the numbers slide down to $1.85 trillion, a low we haven’t seen since last December, and almost a record dip since 2021.

In plain English? Derivatives are the big cheese in the crypto world. Even with a slowdown, they still made up a whopping 78.2% of total trades in July. And get this, in Q2 2023, derivatives volume was six times beefier than spot volume, even with the overall market feeling a pinch.

Dessislava Aubert, a smarty-pants from Kaiko, spilled the beans saying, “Right now, offshore exchanges, mainly Binance, wear the crown. But their grip’s been slipping. There’s room to grow, and Coinbase, with its gold-star reputation, might just be the game-changer we’ve been waiting for.”

Well, there you have it! Exciting, uncertain, but oh-so-enticing times ahead in the wild world of crypto. Stay tuned, folks!

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