Key Takeaways
- Coinbase has launched XRP futures contracts to be settled in US dollars, and trading is available from Sunday to Friday.
- The rising demand for XRP by institutional investors has helped increase bullish sentiment.
- Coinbase Derivatives’ offerings expand with increasing institutional interest in altcoin derivatives.
Leading North American top-tier crypto exchange Coinbase has announced a major trading expansion after filing with the Commodity Futures Trading Commission (CFTC) to offer XRP futures contracts.
According to a press release by the firm, the exchange rolled out two XRP futures contracts on its derivatives exchange to offer investors new tools to manage risk while gaining exposure to the price of the fourth-largest crypto asset.
Launching Pad Towards Launch of a Spot ETF
The statement said the newly launched XRP futures contracts will be available in two sizes. First will be the NANO XRP futures product, which is designed for small-scale traders. It represents 500 XRP per contract and settles in US dollars. The product is aimed at smaller institutions and retailers with access to lower capital who are interested in maintaining exposure to XRP price movements.
Next is the XRP futures product, which represents 10,000 XRP per contract and is also cash-settled in USD. It targets active traders and large institutions. The latest crypto products now join a growing lineup of at least 20 other futures products by the company, including Bitcoin, Ether, Dogecoin, Stellar, Chainlink, and Solana.
The newly launched XRP futures contracts will be a game changer for Ripple’s token as they will likely bolster its institutional acceptance and finally lead to its market maturity. The products will enable institutions that usually shy away from unregulated platforms to get exposure to leading cryptocurrencies safely. Industry participants consider crypto futures a launching pad towards the eventual launch of a spot ETF product in the US market. They also help boost an asset’s price while reducing market manipulation.
Contender for the Position of Leading Altcoin
According to data from crypto analyst Kaiko Report, XRP is a serious contender for the position of leading altcoin. Thanks to its enlarged market depth, XRP raced ahead of Solana within the US spot crypto ETF race. At the moment, over a dozen spot XRP ETF filings are waiting to be reviewed by newly appointed SEC Chair Paul Atkins, who has just been sworn in.
The move comes as XRP market sentiment looks positive following a series of wins after Ripple Labs and the SEC formally agreed to discuss a resolution of their long-standing legal dispute. Moreover, several fund managers, including Bitwise, Canary Capital, 21Shares, and Franklin Templeton, have filed with the SEC for XRP-related investment products.
Conclusion
According to statistics from CoinGecko, the price of XRP at the time of writing was around $2.1, representing a slight 3% surge in the last 24 hours. Rising institutional adoption is expected to significantly boost the price of a token known for its ability to facilitate fast, low-cost cross-border payments. Cryptocurrencies are now expected to play a significant role in traditional financial systems after having been siloed over the past decades.
Frequently Asked Questions (FAQs)
What are the basics of crypto futures?
Futures contracts are agreements to buy or sell a predetermined amount of a commodity or financial product on a specified date. Crypto futures contracts have a fixed lifetime, meaning they expire at some point.
How long do investors hold crypto futures contracts?
Perpetual futures allow traders to hold positions for as long as they want but regulated futures have defined start and end dates. At the expiration date, the contract is settled via cash at the agreed-upon price.
What happens if a futures contract expires?
Futures contract expiration marks the last day that you can trade a futures contract before it expires. After this day, the contract is settled in cash or through the physical delivery of the underlying asset based on the terms of the agreement.
