Coinbase has made two acquisition attempts at FTX Europe since it filed for bankruptcy in November 2022 in an effort to grow its derivatives business internationally.
Bitcoin exchange Since declaring bankruptcy in November 2022, Coinbase has made two attempts to buy FTX Europe in an effort to grow its derivatives business internationally. Cointelegraph has discovered that the firm, however, has opted against going ahead with the transaction.
In November 2022, after the catastrophic failure of its parent business, and again in September 2023, Coinbase reportedly considered buying FTX’s European division. A representative at Coinbase confirmed the information:
Parties interested in FTX Europe are apparently Coinbase, Crypto.com, and Trek Labs, a cryptocurrency company. The deadline for the sale has been moved forward to September 24, according to Fortune. FTX invested close to $400 million in the purchase of its European division.
Under the supervision of a Cyprus regulatory license, FTX Europe ran its derivatives operation. At the time of the organization’s bankruptcy, it was the sole company providing various well-liked derivative products, such as perpetual futures. Financial products known as derivatives derive their value from an underlying asset, such as Bitcoin. BTC $26,573 Derivatives come in a variety of forms, such as options, futures, and swaps. Investors utilize derivatives for market speculation, hedging, and leverage. Both traders and institutional investors use it frequently as an investing technique.
Given that trading in cryptocurrency futures is increasing despite the bad market, the purchase might increase Coinbase’s fee income. In the second quarter of 2023, $327 million of Coinbase’s $707 million in income came from spot trading, a 13% decrease from the first quarter, according to the exchange’s most recent quarterly financial report.
In the meantime, CCData reports that the total value of derivatives traded globally on centralized exchanges rose by 13.7% in June to $2.13 trillion. With a volume of almost $1.21 trillion in June, Binance was the most popular exchange for trading derivatives of cryptocurrencies. OKX exchange came in second with $416 billion, an increase in activity of 44.9%. On the CME market, the volume of bitcoin futures surged as well, hitting $37.9 billion, a 28.6% month-over-month gain.
Additionally, Coinbase has entered the US futures markets. It received a regulatory license in August to provide qualifying consumers in the nation with investments in cryptocurrency futures.
Through its derivatives exchange, FairX, which is governed by the Commodity Futures Trading Commission, Coinbase was able to issue Bitcoin and Ethereum $1,592 in futures contracts thanks to the permission. In accordance with the announcement made at the time by Coinbase, the global market for cryptocurrency derivatives accounts for around 75% of all cryptocurrency transaction volume globally and is a “critical trader access point.”
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