FTX’s derivatives exchange has issued futures contracts on the future price of Coinbase Inc. shares. In the documentation it says that CBSE will allow traders to speculate on the price of the shares before their public listing on the stock exchange (IPO).
Coinbase pre-IPO contracts have arrived! Spot margin enabled up to 5x leverage: https://t.co/ynQaYOBVSs pic.twitter.com/6ZSyRegQbo
— FTX — Built By Traders, For Traders (@FTX_Official) December 22, 2020
CBSE contracts allow traders to speculate on the price at which Coinbase shares will be listed on the stock exchange. In other words, the futures track the market capitalization of the largest cryptocurrency exchange in the United States.
As of writing, the contracts imply Coinbase’s market capitalization at around $57.5 billion: the current contract price is about $230, and the maximum market capitalization is estimated at $250 million.
Data: FTX / TradingView.
The expiration date is the close of Coinbase’s first trading day on the stock exchange or June 1, 2022, when the contracts will automatically become fractional tokenized shares.
If the listing on the stock exchange does not occur by the specified date, the contracts will settle at a price of $32, with Coinbase Inc. valued at $8 billion.
The contracts also support margin trading with leverage up to 1:5. Within a few hours of listing, trading volume of the contracts stood at around $2.1 million.
“So far, that’s a fairly decent volume. The Coinbase contracts have been among the most sought-after products,” said Sam Bankman-Fried, CEO of FTX, in a comment to The Block.
As of writing, the CBSE daily trading volume had fallen to $230,340.
The exchange announced the listing of new Coinbase contracts a week earlier, alongside a similar product for Robinhood. This is the second such product from FTX after Airbnb.
Coinbase filed for an IPO on December 18. Messari analysts valued the potential market capitalization of the company after it becomes public at $28 billion.
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