Coinbase Expands Futures Contracts

Coinbase announced on Tuesday that its derivatives exchange now offers futures contracts for Solana (SOL) and Hedera (HBAR), expanding its product range to cover more cryptocurrencies.

Regulated by the CFTC, Coinbase’s derivatives arm now features futures contracts for a total of 19 assets, including Dogecoin, Litecoin, and gold, along with various altcoins.

This move reflects an increasing demand for crypto-focused investment products among both crypto and traditional financial services firms. In recent weeks, many of these companies have filed applications for spot crypto ETFs in the U.S., spurred by the new Trump administration’s more crypto-friendly policies.

Last week, the SEC began evaluating applications for Solana ETFs, which could broaden investment options beyond Bitcoin and Ethereum for both retail and institutional investors in the U.S. The SEC may extend its review period up to 240 days, starting with a 21-day review.

The relationship between Coinbase’s new futures contracts and the CFTC is significant, particularly after the SEC alleged in a 2023 lawsuit that Solana traded on Coinbase as a security, subject to SEC regulations.

Following the resignation of former SEC Chair Gary Gensler, the SEC is re-evaluating its stance on digital assets. The Coinbase lawsuit is currently on hold until a higher court reviews conflicting legal rulings. The SEC has promised to collaborate with the CFTC to establish clear rules under new leadership.

Coinbase’s regulated futures for Solana could influence the SEC’s decision-making. In evaluating Bitcoin and Ethereum ETF approvals, the SEC has considered the existence of regulated futures markets to mitigate concerns about fraud and market manipulation.

According to Bitwise CIO Matt Hougan, “All commodity-based ETPs, or exchange-traded products, have had a regulated futures market.”

However, Gabe Shelby, head of research at CF Benchmarks, suggests that the SEC’s criteria for approving crypto-focused ETFs might evolve, making a regulated futures market less crucial for launching additional tokens. “It’s very likely that we reach a point where a regulated futures market isn’t entirely necessary,” he remarked.

Edited by James Rubin