Coinbase Launches XRP Futures Contracts on April 21
1min read Coinbase Institutional, a prominent US-based cryptocurrency exchange, has taken a significant step by filing with the US Commodity Futures Trading Commission (CFTC) to introduce futures contracts for Ripple’s XRP token. This move, announced on April 3, aims to provide a regulated and capital-efficient method for investors to gain exposure to one of the most liquid digital assets in the market.
The new XRP futures contract, set to go live on April 21, will be a monthly cash-settled and margined contract trading under the symbol XRL. Each contract will represent 10,000 XRP, currently valued at approximately $20,000 based on the token's price of $2 per unit. The contract will track the price of XRP and will be settled in US dollars. Trading will be available for the current month and the next two months, with a safety measure in place to pause trading if spot XRP prices fluctuate by more than 10% within an hour.
Ask Aime: What impact will the introduction of XRP futures contracts by Coinbase Institutional have on the cryptocurrency market, particularly for retail investors?
Coinbase has engaged with Futures Commission merchants (FCMs) and market participants to support the launch of the XRP contract. This initiative underscores the growing interest and demand for regulated XRP trading products in the US market. coinbase is not the first to offer XRP futures in the United States; in March, another crypto exchange based in Chicago announced the launch of the first CFTC-regulated XRP futures in the country.
XRP futures trading is already available on several leading centralized crypto exchanges globally, including Binance, OKX, Bybit, and BitMEX. The introduction of XRP futures by Coinbase further expands the options for investors seeking to trade this digital asset in a regulated environment.
In late March, it was reported that XRP derivatives’ funding rates had turned negative, reflecting a bearish sentiment among investors. Funding rates in perpetual futures markets are periodic payments between traders that help align the futures price with the spot price. Positive funding rates indicate that long traders (buyers) pay short traders, while negative funding rates mean short traders (sellers) pay long traders. The negative funding rates suggest that short traders are willing to pay a premium to maintain their positions, indicating strong conviction from bearish derivatives traders.
As of April 4, XRP funding rates remained negative on major derivatives exchanges, highlighting the cautious outlook among traders. This development comes at a time when the cryptocurrency market is experiencing heightened volatility and regulatory scrutiny. The launch of XRP futures by Coinbase could provide a more stable and regulated avenue for investors to engage with the asset, potentially mitigating some of the risks associated with unregulated trading platforms.
