Shiba Inu (SHIB) may be on the brink of a significant price rally following a filing by Coinbase Derivatives, a subsidiary of Coinbase, with the Commodity Futures Trading Commission (CFTC) to list SHIB futures contracts.
According to a Monday tweet by International Blockchain Consulting Group (IBC group), the proposed SHIB futures contract is expected to be listed on July 15 and will be settled in cash monthly. Each contract will represent ten million SHIB, with a minimum tick size of $0.00001 per Shiba Inu and a minimum tick value of $0.10 per contract. Notably, this new financial product aims to provide investors with a regulated way to speculate on the price movements of Shiba Inu.
Coinbase also filed applications for perpetual futures contracts for other notable altcoins, including Chainlink (LINK), Avalanche (AVAX), Stellar Lumen’s (XLM), and Polkadot (DOT). The exchange’s move to diversify its offerings underscores its commitment to expanding the accessibility of cryptocurrency derivatives in the United States.
In its application, Coinbase detailed the mechanics of the SHIB futures contract, highlighting how the final settlement price will be determined. The price will be based on the Market Vector benchmark reference rate at 4:00 PM London time, using a 2-hour settlement window divided into 40 three-minute intervals. During each interval, the volume-weighted median price will be calculated, with the final settlement price being a simple average of these 40 values.
That said, it’s important to note that volatility is a key consideration for SHIB, known for its significant price swings driven by community sentiment and low price compared to other cryptocurrencies.
Coinbase acknowledged SHIB’s 30-day trailing standard deviation of daily price changes at 5.2%, indicating higher volatility. However, the exchange expressed confidence in its ability to manage this volatility through various mechanisms, including price banding, daily price limits, kill switches, exposure limits, and margin levels.
If approved by the CFTC, Coinbase will become the first U.S. exchange to offer margined futures contracts for SHIB. This pioneering move could enhance market accessibility and foster the maturation of SHIB derivatives in a regulated environment.
Meanwhile, the Shiba Inu community is optimistic that this development could spark a price rally, similar to the impact of other cryptocurrencies following the introduction of futures contracts.
The potential introduction of SHIB futures contracts also fuels speculation about a future spot ETF for Shiba Inu. With Bitcoin and Ethereum making strides in the ETF space, SHIB holders are hopeful that their favorite meme coin could be next in line, further solidifying its place in the crypto market.
At press time, SHIB was trading at $0.00001648, having increased modestly by 0.15% in the past 24 hours.