Key Takeaways:
- Pre-Launch Futures Trading: Coinbase International will allow trading futures on upcoming tokens before their official launch, converting to perpetual contracts post-listing.
- High Risk & Leverage: Initial margin cap at 50% with a $50,000 position limit per token, using a 4-hour EMA for pricing, with high risk due to low liquidity and volatility.
- Institutional and Retail Access: Available to institutional investors through Coinbase International and retail traders via Coinbase Advanced.
Coinbase International is introducing a new feature that allows users to trade futures on upcoming tokens and coins before they officially launch.
This follows similar moves by exchanges like Binance, Bybit, Bitget, and OKX.
We’re excited to announce support for pre-launch markets on Coinbase International Exchange and Coinbase Advanced. Trade new tokens before they launch and participate in price discovery, all within a trusted and secure platform. pic.twitter.com/rJ3eclyHDC
— Coinbase International Exchange 🛡️ (@CoinbaseIntExch) June 17, 2024
These pre-launch futures contracts will convert to standard perpetual contracts once the underlying tokens are listed on spot exchanges.
The feature will be available to institutional investors through Coinbase International and to retail traders via Coinbase Advanced.
Initial margin cap is set at 50% (2x leverage) with a notional position limit of $50,000 per token.
Coinbase announce pre-launch markets on @coinbase International Exchange and Coinbase Advanced to allow users to trade perpetual futures contracts on tokens that have not launched yet: 👀 https://t.co/8NgIvMWwws pic.twitter.com/1iKo8AUjjy
— MartyParty (@martypartymusic) June 17, 2024
Unlike standard futures, these pre-launch markets use a 4-hour exponential moving average (EMA) for pricing.
Coinbase warns that pre-launch markets are high-risk due to lower liquidity, higher volatility, and increased liquidation risk, and they are not supported by the exchange’s Liquidity Support Program.
Additionally, there is a risk that the pre-launch tokens may never list, leading to potential suspension or delisting of these markets.
Coinbase starts offering pre-launch markets trading on its international and advanced exchanges https://t.co/jYZv7JyDDf
— The Block (@TheBlock__) June 17, 2024
Coinbase International, launched in May 2023, is the overseas branch of the U.S.-based exchange and holds a Class F license from the Bermuda Monetary Authority.
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