Coinbase Futures filed a prospectus with the CFTC to list perpetual futures for SHIB, which will be settled monthly in cash, and expects to list them on July 15.
The exchange also filed applications for perpetual futures for other altcoins, including Chainlink, Avalanche, Stellar Lumen’s XLM, and Polkadot.
American exchange Coinbase has given Shiba Inu its latest big win by filing an application with the CFTC to list SHIB futures contracts later this month.
Through its CFTC-regulated subsidiary Coinbase Derivatives, the exchange filed its initial listing of the 1k Shib Futures contract which it expects to list on July 15. The contract will be settled in cash every month and will be worth ten million SHIB. The minimum tick size will be $0.00001 per Shiba Inu while the minimum tick value will be $0.10 per contract.
In its application, the exchange revealed that the final settlement price of the expiring contract would be the value of its Market Vector benchmark reference rate at 4.00 PM London time. It will determine the index value using a 2-hour settlement window, broken down into 40 3-minute intervals.
“In each of these intervals, MVIS aggregates all trades and volume from the constituent exchange and calculates a volume-weighted median price for the interval. The settlement is based on a simple average of the 40 volume-weighted median prices calculated,” the exchange noted.
One of the key issues Coinbase considered in its SHIB futures contract is the meme coin’s volatility. Being a meme coin that is strongly driven by its community and whose price is much lower compared to its peers, SHIB tends to experience high volatility. Its 30-day trailing standard deviation of daily price changes stands at 5.2%.
However, Coinbase is confident that it can handle any volatility, stating:
…the Exchange has managed both periods of prolonged volatility and unexpected spikes in volatility in its existing products without market interruptions and with ample continuous liquidity.
Coinbase will deploy such features as price banding, daily price limits, kill switches, exposure limits and margin levels to deal with this volatility.
SHIB ETF and Price Effect
If the CFTC gives the green light to Coinbase, the exchange will be the first to offer margined futures contracts for SHIB in the US. The exchange noted:
For Shiba Inu, this is a significant milestone that its holders believe could spark a price rally. At press time, the meme coin trades at $0.00001716, gaining just over 1% in the past day. Despite a rally at the start of last week that didn’t last long, SHIB has traded sideways for most of the last seven days, gaining just 1.7% overall.
Besides boosting the price, the SHIB community believes that the new margined futures contracts could be a precursor to a SHIB spot ETF. This year, Bitcoin received the green light for its spot ETFs, which have been a massive success. Ethereum is almost there as well, as Crypto News Flash reported. Once these two top cryptos are up and running, there’s no telling which token will be next, and SHIB holders believe they stand as good a chance as any other crypto.
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