Coinbase acquires Fairx exchange to bring derivatives trading to its users. As of now, Coinbase only has a spot market on its platform, which is good but not enough. Since Fairx is a regulated derivatives trading platform, the company can leverage it and its resources to offer the same to millions of its users. The derivative trading feature is also going to bring a lot of new users to Coinbase and boost their revenue and profits.
Coinbase’s future plans
The initial goal with this acquisition is to offer derivative trading via Fairx’s ecosystem. This will help them take things slow and make sure things are executed properly. And then, with time, the company is also going to use Fairx’s infrastructure to offer the same options to all Coinbase’s users via their platform.
This will make Coinbase an even bigger competitor to Binance that already has these features. But the problem is Binance is not very easy to use and has a lot of controversy going on. The regulatory hurdles that they are facing don’t make it a very attractive exchange choice for users. And with Coinbase lies trust, which is a big point. Hence, the company wants to bring the derivative trading option to millions of its users with an easy-to-use experience.
Why is this important?
The company said that liquid derivative markets are essential for the proper functioning of capital markets. There is a very high demand for such products, and a lot of people want to explore them besides investing in spot. It does need a lot of experience, which is the reason for that is high volatility and leverage available to users.
FairX was formed in partnership with prominent industry firms to provide future products that are tailored to the needs of active retail investors around the world. It brings a simple, easy-to-understand product design and provides lower-cost, right-sized exposure to benchmark tracking of liquid asset types. The company is a trademarked operational name of LMX Labs, LLC. It is a legal organization established with the US Commodity Futures Trading Commission as a Designated Contract Market.
What are your thoughts as Coinbase acquires Fairx exchange to bring derivative support? How fruitful will it be for the company in the long run? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.