Coinbase is set to introduce a groundbreaking financial product that merges traditional equities with cryptocurrency exposure. The Mag7 + Crypto Equity Index Futures, scheduled for launch on September 22, will be the first of its kind to be listed in the US market. This announcement comes hot on the heels of Coinbase’s introduction of CFTC-regulated perpetuals for US customers just two months ago.
The innovative index comprises 10 components, each carrying an equal weight of 10%. The main attractions are the “Magnificent Seven” tech giants, including Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, and Tesla. Additionally, the index includes Coinbase’s own stock and BlackRock’s Bitcoin and Ethereum ETFs, providing indirect exposure to the two largest cryptocurrencies by market capitalization.
The product aims to cater to investor demand for a blend of traditional financial instruments and digital assets. Coinbase emphasizes that this hybrid index fills a void in the market, as no US-listed derivative has previously offered dual exposure to equities and cryptocurrencies within a futures product.
The contracts are settled monthly in cash and are calculated based on the index value. For instance, at an index price of $3,000, each contract would represent a notional value of $3,000. MarketVector is responsible for maintaining and calculating the index.
This launch represents a continuation of Coinbase’s foray into derivatives, following the introduction of CFTC-regulated perpetual contracts with up to 10x leverage and minimal fees on major cryptocurrencies like Bitcoin, Ethereum, and Solana.
Coinbase views the equity index futures as a significant step forward in its product offerings, paving the way for a broader range of multi-asset derivatives that enhance accessibility and efficiency for investors. The company plans to extend availability to retail users through partner platforms in the near future.
In conclusion, the Mag7 + Crypto Equity Index Futures mark a new chapter in the evolution of financial products, bridging the gap between traditional equities and digital assets. This innovative offering from Coinbase promises to revolutionize the market and provide investors with a unique opportunity to diversify their portfolios.