Coinbase will allow retail investors to trade crypto futures starting Monday. It is the largest U.S. exchange by volume and will offer them on the new Derivatives Exchange platform.

This move follows the acquisition of FairX by Coinbase in January. It was part of Coinbase's goal to offer customers crypto options and futures trading.

FairX was an established seller of futures products and was already registered with CFTC. This gives Coinbase a head start in the crypto derivatives market worth $3 trillion.

Coinbase now calls FairX the Coinbase Derivatives Exchange. Its "nano Bitcoin Futures"--1/100th Bitcoin--is marketed under the ticker BIT--is the first crypto derivatives product to be listed.

Decrypt was told by a Coinbase spokesperson that this is "one step towards creating a robust, regulated crypto derivatives marketplace."

If BIT futures were made available today, their price would be around $211 based on a BTC rate of $21,000.

Boris Ilyevsky is the Head of Coinbase Derivatives Exchange. He stated that FairX has brought in a world-class team with deep experience across product development and market structure.

Compliance, market-leading exchange technology, and a proven ability to deliver listed futures. The Coinbase-designed interface makes it easy to trade crypto derivatives.

Futures are derivative financial products that set a price and a date at which an asset can be sold. This price is independent of current market prices.

For example, the SEC allowed Bitcoin ETFs in October. However, they only permitted a Bitcoin futures ETF and not a spot ETF tied to Bitcoin's current price.

Many traders prefer futures because they offer 24/7 trading and lower upfront investments. The BIT futures contract offers the same benefits but was designed for retail traders.

After acquiring LedgerX, the competing exchange FTX follows a similar route. In addition, Binance offers derivative products but has had to pull back in certain markets because of regulatory concerns.

Important to know that BIT futures are not available directly from Coinbase. They will only be offered by third-party clearing and retail brokers. Starting June 27, Coinbase BIT Futures will be offered by firms such as Ironbeam and NinjaTrader.

Coinbase can't offer futures until it has regulatory approval for its FCM (futures Commission Merchant) license. Although the crypto market cap has declined significantly in the last week, Ilyevsky stated that increased accessibility and product development will lead to "significant growth."

He stated, "It is more important than ever that the benefits of futures are brought to a wider market," "so all types of traders can have access to regulated U.S. cryptocurrency derivatives markets to express themselves or hedge their crypto assets."