Market Analysis Report (25 Jul 2022)

While spot trading volumes have been plunging in the cryptocurrency industry, Coinbase’s new derivatives unit is seeing retail traders pour into its “nano” bitcoin futures product (BIT), which recently saw volumes hit records highs for three straight days over the last week.

Coinbase launched its cash-settled BIT futures product in June. Each BIT contract represents 1/100^th of a bitcoin and is available on a number of different retail brokers, including NinjaTrader, EdgeClear, Wedbush, Ironbeam, and Tradovate.

Coinbase is awaiting regulatory approval for its futures commission merchant license and is as such unable to offer the product to users directly.

On July 19, notional volumes for nano futures hit 217,045 after increasing for several days , but declined to 117,493 on July 22. For most of June and July, BIT trading volumes sat below 50,000 contracts per day.

Coinbase’s team noted the product saw a “surge in activity ever since retail broker partners started marketing/ promotional efforts last week.”