FTX Exchange Launches Pre-IPO Futures Contracts for the Coinbase Public Listing

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After the San Francisco-based exchange Coinbase announced it was registering with the U.S. Securities and Exchange Commission (SEC) in order to have an initial public offering (IPO), FTX Exchange CEO Sam Bankman-Fried said the company would launch pre-IPO futures. On December 21, Bankman-Fried announced the launch was now live and Coinbase pre-IPO futures contracts are now swapping for $235 per unit.

People can wager on the Coinbase initial public offering (IPO) by leveraging Coinbase pre-IPO futures contracts on the crypto trading platform FTX Exchange. FTX is well known for launching futures markets on interesting things like the recent 2020 election outcome and pre-IPO contracts for Airbnb.

After detailing that FTX may launch pre-IPO futures products for the Coinbase IPO, FTX Exchange CEO Sam Bankman-Fried announced the launch on Twitter.

“Ok, guys we did it,” Bankman-Fried tweeted. “With spot margin, up to 5x,” the FTX CEO added.

According to the contract specs, the “CB pre-IPO Contracts” represent a futures contract with the value tied to the market valuation of Coinbase Inc. at the end of the first trading day.

FTX Exchange Launches Pre-IPO Futures Contracts for the Coinbase Public Listing

The contracts are settled by exchanging crypto-assets and because they are futures products, the FTC CB pre-IPO contracts “have no claim to delivery of the underlying nor shareholder rights.” The new FTX Coinbase futures market has seen a significant amount of trade volume so far, capturing $2.2 million in volume during the last 24 hours.

RECOMMENDED READ:  The Coinbase IPO is coming, according to SEC filing

At the time of publication, the pre-IPO Coinbase contracts are trading for $235 per unit against the U.S. dollar. Additionally, decentralized finance (defi) community members have also created an unofficial Coinbase futures IOU which has been seen swapping on decentralized exchange (dex) platforms like Uniswap and Sushiswap.

Ever since the company announced going public, crypto advocates have been discussing the first-ever cryptocurrency exchange public listing.

“Getting major flashbacks right now to Amazon’s IPO in the 1990s, when I was a trader on a big sell-side desk,” one individual tweeted. “Feels very similar in several ways including industry backdrop and public sentiment, the latter of which included a huge amount of skepticism and scorn,” he added.

There have been many guesses as to what Coinbase will be worth after the IPO and some estimates believe it could be upwards of “$28 billion.” The San Francisco exchange has grown enormous with more than 35 million users in over 100 countries.

Coinbase already raised $500 million in equity financing from Greylock Partners, Andreessen Horowitz, MUFG, Tiger Capital Management, and more. In 2018, Coinbase raised $300 million in a Series E funding round and was estimated to be worth roughly $8 billion.

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