Coinbase International to Support Pre-Launch Market Trading

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Key takeaways:

  • Coinbase International is establishing a launchpad for emerging crypto businesses, following in the footsteps of centralized exchanges like Binance, Bybit, Bitget, and OKX. 
  • Pre-launch market assets are limited to a $50,000 notional position limit per token and an initial margin of 50%, or two times leverage.

Coinbase International is establishing a launchpad for emerging crypto businesses, following in the footsteps of centralized exchanges like Binance, Bybit, Bitget, and OKX. 

On June 17, Coinbase disclosed that pre-launch markets let customers trade perpetual futures contracts on tokens that haven’t debuted yet. Coinbase further stated:

“When the underlying token is launched on applicable spot exchanges, the instrument converts to a standard perpetual contract.”

Institutional investors will be able to access the service through Coinbase International, while regular traders will have to use Coinbase Advanced. 

Pre-launch market assets are limited to a $50,000 notional position limit per token and an initial margin of 50%, or two times leverage. Additionally, the instrument works in a different way than conventional ordinary futures:

“Pre-launch markets have a different index price mechanism than standard perpetual futures and use a 4-hour exponential moving average (EMA) of the instrument’s mark prices for the Pre-Launch Index Price.”

Coinbase cautioned that pre-launch markets are more vulnerable to higher volatility, decreased liquidity, and increased liquidation risk due to their high-risk characteristics.

Furthermore, the exchange’s Liquidity Support Program does not support pre-launch instruments, which increases the danger of auto-liquidation. 

Additionally, as Coinbase International noted, there’s a potential that pre-launch coins won’t ever proceed through the entire listing process:

“There is a risk — outside of Coinbase’s control — that the underlying token may never launch. If such a determination was made, the pre-launch market would not be able to convert into a standard perpetual futures market, and the market may need to be suspended and/or delisted.”

Coinbase International, the foreign division of the American exchange of the same name, was established in May 2023. The platform is licensed by the Bermuda Monetary Authority under Class F.

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