Coinbase (NASDAQ:COIN), the world's second-largest cryptocurrency exchange, has secured approval from the Bermuda Monetary Authority to offer derivatives, including perpetual futures, to non-US customers. This development was announced on Thursday and comes as part of the company's strategic expansion into global markets.
The approval allows Coinbase to tap into an estimated 75% of global cryptocurrency trade. This is expected to significantly boost the exchange's international operations, which were launched in Q2 2023, and have already seen over $5.5 billion in spot and institutional volumes.
Coinbase has shown resilience and strategic growth amidst legal challenges, including a Securities law violation lawsuit by the Securities and Exchange Commission (SEC). Amid these challenges, the company had threatened to exit the US market, where it has a trading volume of $900 million. This is significantly lower than Binance's $5.3 billion trading volume. The move to offer derivatives to non-US customers could potentially attract more users and increase its global footprint.
According to InvestingPro, Coinbase has a market cap of 17.77 billion USD and a P/E ratio of -13.61. The company has seen a declining trend in earnings per share, and two analysts have revised their earnings downwards for the upcoming period, as per InvestingPro Tips. The company's stock generally trades with high price volatility and the price has fallen significantly over the last five years. Despite these challenges, the company's year-to-date price total return stands at 102.09%.
Retail derivatives trading represents a significant portion of the cryptocurrency market. Coinbase's entry into this space could reshape the competitive dynamics among cryptocurrency exchanges worldwide. The company's stock price movements are quite volatile and analysts do not anticipate the company will be profitable this year. Yet, the company has shown significant resilience.
This latest development follows Coinbase's Q2 launch of its international exchange platform. The platform has been successful thus far, achieving over $5.5 billion in spot and institutional volumes. The addition of derivatives trading to its portfolio of services is expected to further enhance its market position.
In conclusion, despite ongoing legal challenges in its home market, Coinbase continues to expand its global presence. The approval from the Bermuda Monetary Authority marks an important step in this strategy and could potentially increase its user base and trading volumes in the future. For more insights like these, consider subscribing to InvestingPro, which offers a wealth of tips and real-time metrics for companies like Coinbase.
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