Last edited: Jan 14, 2022

Coinbase, the largest cryptocurrency exchange in the U.S., announced that it has acquired derivatives exchange FairX.

On the Coinbase Blog, the company issues a statement regarding the acquisition of FairX, saying that acquiring FairX helps pave the path for Coinbase to build a robust and regulated crypto derivatives market.

“Coinbase is committed to providing our retail and institutional customers with the most trusted and complete suite of trading tools to access the cryptoeconomy. As crypto matures as an asset class and the world’s most sophisticated investors deepen their journey into the cryptoeconomy, a healthy, well-regulated derivatives market will be critical for long-term success.

Through this acquisition, we plan to bring regulated crypto derivatives to market, initially through FairX’s existing partner ecosystem. Over time, we plan to leverage FairX’s infrastructure to offer crypto derivatives to all Coinbase customers in the US. We want to make the derivatives market more approachable for our millions of retail customers by delivering an easy-to-use user experience that Coinbase is known for.”

Since Coinbase currently only offers spot trading, creating access for investors to gain exposure to crypto outside of spot markets is crucial for them to execute more complex trading strategies and manage portfolio diversity/risk. This should open up the doors to trading for more investors, whether they may be institutional or retail.

Last month, Crypto.com, a massive centralized crypto exchange based in Singapore, also acquired two derivatives exchanges from the IG Group. It is anticipated that Coinbase’s acquisition may be to ramp up its involvement in building a sound crypto derivatives market to compete with Crypto.com.

This news has been no help to prices of the crypto market, however, as most coins are down over the past 24 hours. Notably, ADA is down nearly 7% today, making the recovery that occurred on Wednesday disappear just as fast as it came.

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