Markets
Coinbase Launches Pre-Launch Markets for Global Traders
Coinbase has introduced a new trading feature on its international and advanced platforms that allows traders to engage in cryptocurrency markets not yet available on spot exchanges.
This new service, called “pre-launch markets”, allows both institutional and retail participants to trade perpetual futures contracts on upcoming tokens, offering a unique opportunity for speculation before their official launch.
Accessible exclusively to users outside the US
The service is tailored for users outside of the US, Canada and the UK, specifically serving qualified institutional clients through Coinbase International and retail traders through Coinbase Advanced. That initiative follows Coinbase’s strategy of providing diverse and innovative trading solutions, responding to the growing demand for more sophisticated crypto investment tools.
As the first of these pre-launch listings went live this Monday, participants now have the potential to significantly influence price discovery for new projects. Unlike regular perpetual futures, these pre-launch markets employ a 4-hour exponential moving cost average of token token prices to calculate the pre-launch index price.
This method helps stabilize price volatility and provides a clearer picture of market expectations.
Enhanced security measures and business conditions
Recognizing the high-risk nature of these markets, Coinbase has implemented several security measures. Unlike the typical 10x leverage found in standard perpetual futures, pre-launch markets are restricted to a maximum leverage of 2x with a $50,000 position limit.
This conservative approach aims to mitigate risks associated with issues of high volatility and liquidity inherent to the pre-launch phases.
Additionally, these markets are excluded from Coinbase’s Liquidity Support Program (LSP), making them prone to unique risks such as increased volatility and greater settlement risks. Participants are encouraged to approach these opportunities with caution, as these markets also present a higher risk of automatic deleveraging compared to standard perpetual futures.
Coinbase’s addition of trading on pre-launch markets is a positive development for expanding opportunities for traders in the crypto space.