Coinbase filed with the US Commodity Futures Trading Commission (CFTC) to launch futures contracts for Ripple’s XRP token.

The move comes after a positive development for the crypto derivatives market in the US, reflecting shifting regulatory ties in the country.

Coinbase Files for XRP Futures Trading With CFTC

Coinbase Derivatives has submitted a filing to self-certify XRP futures. It will provide a regulated, capital-efficient means for market participants to gain exposure to XRP. The new contract could go live as soon as April 21.

“We’re excited to announce that Coinbase Derivatives has filed with the CFTC to self-certify XRP futures – bringing a regulated, capital-efficient way to gain exposure to one of the most liquid digital assets. We anticipate the contract going live on April 21, 2025,” read the announcement.

Meanwhile, the official filing indicates that the XRP futures contract will be a monthly cash-settled and margined contract trading under the symbol XRL.

Each contract represents 10,000 XRP and will be settled in US dollars. Trading will be available for the current month and two subsequent months. As a protective measure, trading will be temporarily halted if the spot XRP price moves more than 10% within an hour.

The Coinbase Exchange also confirmed that it has engaged with Futures Commission Merchants (FCMs) and other market participants. Both references reportedly expressed support for the launch.

However, Coinbase is not the first US-based exchange to introduce regulated XRP futures. In March, Chicago-based Bitnomial launched what it advertised as the country’s first CFTC-regulated XRP futures contract.

For Coinbase, however, the boldness comes after the CFTC eased key regulatory hurdles for crypto derivatives trading. As BeInCrypto reported, this signaled a more accommodating stance towards the sector.

“Pursuant to Commodity Futures Trading Commission (“CFTC” or “Commission”) Regulation 40.2(a), Coinbase Derivatives, LLC (the “Exchange” or “COIN”) hereby submits for self-certification its initial listing of the XRP Futures contract to be offered for trading on the Exchange…,” an excerpt in the filing indicated.

This suggests that the commodities regulator’s shift, revoking previous crypto-related guidelines, may boost institutional confidence. For XRP, this development bolsters confidence in the asset’s previously contentious status following Ripple’s recent regulatory breakthrough.

“Coinbase Derivatives’ filing with the CFTC to self-certify XRP futures aims to legitimize XRP trading by offering a regulated, capital-efficient product for investors,” one user remarked.

The futures contract might also help the odds of XRP ETF approval. Recently, the SEC delayed several applications to create one, and its status is in limbo.

Data on Polymarket shows bettors see a 74% chance for XRP ETF approval in 2025 and a more modest 34% by July 31.

Regulatory and Legal Developments Favor Coinbase

Elsewhere, the timing of this filing aligns with recent favorable regulatory developments for Coinbase. Reports suggest Illinois intends to drop its lawsuit against the exchange over its staking services.

Up to 10 states filed a lawsuit against Coinbase in June 2023 alleging that its staking program constituted unregistered securities offerings.

This recent development makes Illinois the fourth state to withdraw legal action against Coinbase. Vermont, South Carolina, and Kentucky also dismissed their cases on March 13, 27, and 31, respectively.

However, the cases remain active in Alabama, California, Maryland, New Jersey, Washington and Wisconsin.

These legal retreats coincide with the US SEC’s (Securities and Exchange Commission) February decision to abandon its federal lawsuit against Coinbase. BeInCrypto reported that this development marked a broader shift in the regulatory approach under the current administration.

“Regulators are losing steam, and Coinbase is stacking quiet courtroom wins. Staking’s future in the US might just be back on track,” a user commented.

Illinois’ decision to drop its lawsuit comes as the state advances a Bitcoin strategic reserve bill. Specifically, Illinois State Representative John M. Cabello introduced House Bill 1844 (HB1844), highlighting Bitcoin’s potential as a decentralized, finite digital asset.

“A strategic bitcoin reserve aligns with Illinois’ commitment to fostering innovation in digital assets and providing Illinoisans with enhanced financial security,” the bill read.

The crypto market is set to see $2.58 billion in Bitcoin and Ethereum options expire today, a development that could trigger short-term price volatility and impact traders’ profitability.

Of this total, Bitcoin (BTC) options account for $2.18 billion, while Ethereum (ETH) options represent $396.16 million.

Bitcoin and Ethereum Holders Brace For Volatility

According to data on Deribit, 26,457 Bitcoin options will expire today, significantly lower than the first quarter (Q1) closer, where 139,260 BTC contracts went bust last week. The options contracts due for expiry today have a put-to-call ratio 1.25 and a maximum pain point of $84,000.

The put-to-call ratio indicates a higher volume of puts (sales) relative to calls (purchases), indicating a bearish sentiment. More traders or investors are betting on or protecting against a potential market drop.

On the other hand, 221,303 Ethereum options will also expire today, down from 1,068,519 on the last Friday of March. With a put-to-call ratio of 1.41 and a max pain point of $1,850, the expirations could influence ETH’s short-term price movement.

As the options contracts near expiration at 8:00 UTC today, Bitcoin and Ethereum prices are expected to approach their respective maximum pain points. According to BeInCrypto data, BTC was trading at $82,895 as of this writing, whereas ETH was exchanging hands for $1,790.

This suggests that prices might rise as smart money aims to move them toward the “max pain” level. Based on the Max Pain theory, options prices tend to gravitate toward strike prices where the highest number of contracts, both calls and puts, expire worthless.

Nevertheless, price pressure on BTC and ETH will likely ease after 08:00 UTC on Friday when Deribit settles the contracts. However, the sheer scale of these expirations could still fuel heightened volatility in the crypto markets.

“Where do you see the market going next? Deribit posed.

Elsewhere, analysts at Greeks.live explain the current market sentiment, highlighting a bearish outlook. This adds credence to why more traders are betting on or protecting against a potential market drop.

Bearish Sentiment Grips Markets

In a post on X (Twitter), Greeks.live reported a predominantly bearish sentiment in the options market. This follows US President Donald Trump’s tariff announcement.

BeInCrypto reported that the new tariffs constituted a 10% blanket rate and 25% on autos. While this fell short of market expectations, it was still perceived as a negative development, sparking widespread concern among traders.

According to the analysts, options flow reflected this pessimism, with heavy put buying dominating trades.

“Trump’s tariffs are viewed as severe trade disruption… The market’s initial positive reaction with a price spike to $88 was seen as gambling/short covering, followed by a sharp reversal as reality set in about economic impacts. Options flow remains heavily bearish, with traders noting significant put buying, including “700 79k puts for end of April,” wrote Greeks.live analysts.

Traders snapping up 700 $79,000 puts for the end of April signals expectations of a sustained downturn. According to the analysts, the consensus among traders points to continued volatility, with a potential “bad close” below $83,000 today, Friday, April 4. Such an action would erase the earlier pump entirely.

Meanwhile, many traders are adopting bearish strategies, favoring short calls or put calendars. Shorting calls is reportedly deemed the most effective approach in the current climate.

Therefore, while the market’s initial reaction to Trump’s tariffs was a mix of hope and reality, the reversal reflects the broader economic fallout from Trump’s policies. As traders brace for choppy conditions, the bearish outlook in options trading paints a cautious picture for the days ahead.

Global supply chain disruptions and economic uncertainty remain at the forefront of market concerns.