Coinbase has introduced a new trading feature on its international and advanced platforms that enables traders to engage in markets for cryptocurrencies not yet available on spot exchanges.
This new service, dubbed ‘pre-launch markets,’ allows both institutional and retail participants to trade perpetual futures contracts on upcoming tokens, offering a unique speculation opportunity prior to their official launch.
Accessible Exclusively to Non-U.S. Users
The service is tailored for users outside the U.S., Canada, and the UK, catering specifically to eligible institutional clients through Coinbase International and retail traders via Coinbase Advanced. This initiative follows Coinbase’s strategy to provide diverse and innovative trading solutions, responding to the growing demand for more sophisticated crypto investment tools.
As the first of these pre-launch listings went live this Monday, participants now have the potential to influence price discovery for new projects significantly. Unlike regular perpetual futures, these pre-launch markets employ a 4-hour exponential moving cost average of the token’s mark prices to calculate the Pre-Launch Index Price.
This method helps stabilize price volatility and provides a clearer picture of market expectations.
Enhanced Safety Measures and Trading Conditions
Recognizing the high-risk nature of these markets, Coinbase has implemented several safety measures. Unlike the typical 10x leverage found in standard perpetual futures, pre-launch markets are restricted to a 2x leverage maximum with a $50,000 position limit.
This conservative approach aims to mitigate risks associated with high volatility and liquidity issues inherent in pre-launch phases.
Furthermore, these markets are excluded from Coinbase’s Liquidity Support Program (LSP), making them prone to unique risks like higher volatility and increased liquidation risks. Participants are urged to approach these opportunities with caution, as these markets also carry a higher risk of Auto-Deleveraging compared to standard perpetual futures.
Coinbase’s addition of pre-launch markets trading is a positive development for the expansion of opportunities for traders in the crypto space.
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