The numbers speak for themselves: Coinbase International's Bitcoin perpetual contracts surpassed $100 billion in volume within a week

By setting up shop in the Bahamas, Coinbase played a masterstroke. Far from American constraints, its platform dedicated to derivative products has managed to capture a global demand

Coinbase International, the offshore subsidiary of the renowned cryptocurrency exchange, has achieved an unprecedented feat : its Bitcoin perpetual contracts have witnessed an astounding $100 billion in volume within a mere week. This record-breaking milestone has significant implications for the broader financial landscape and sparks pressing questions about the nature of this crypto frenzy.

Is it simply a consequence of market volatility or a deeper paradigm shift? As we navigate the turbulence of price swings, the flight to safe havens, and the ongoing regulatory games, here’s an analysis of this remarkable phenomenon that is quickly blurring the lines of traditional finance.

Set up in the Bahamas earlier this year, Coinbase International is an integral part of the company’s strategy to expand its derivatives offering. After months of preparation, the platform finally opened its doors in March, presenting an unmatched proposition for traders seeking advanced financial instruments.

Coinbase applied for registration as a Bahamas Digital Asset Exchange on January 12, 2023, and was successful in securing approval for the registration of its International subsidiary as a CC (Central Cryptocurrency Exchange) on March 23, 2023, according to a statement from the Bahamas Financial Services Commission (BFSC).

While Coinbase is known for its wide range of coins and its retail-oriented services in the U.S., its International branch focuses on a smaller selection of cryptocurrencies, but with a broader scope in terms of financial products. Indeed, the platform offers not only spot trading but also futures, options, and other more sophisticated instruments used prevalently by institutional investors and hedge funds.

Coinbase's strategy to create a subsidiary in a country with less stringent regulations while maintaining its main entity, which is publicly traded on Nasdaq, in the U.S. presents a unique hybrid model. It combines the institutional credibility of a listed company with the agility and flexibility of a startup operating in a fast-growing industry.

This approach allows Coinbase to capitalize on new opportunities quickly and efficiently, and it also enables the company to navigate the complex and ever-changing regulatory landscape in different jurisdictions with more ease.

As a result of this strategy, a large portion of the trading activity on Coinbase International consists of institutional investors who are placing large trades in cryptocurrencies like Bitcoin, which are not typically available through traditional financial channels.

This has led to an unprecedented level of trading volume on the platform, with over $100 billion in cryptocurrency derivatives changing hands in a seven-day period recently. To put this into perspective, the entire U.S. stock market, including giants like Apple and Tesla, trades around $80 billion in a busy day.

Traders, both retail and fund managers, view Coinbase International as a backdoor to access crypto financial instruments that are forbidden or heavily restricted in their own countries.

For instance, European traders who wish to trade bitcoin derivatives with leverage, an activity banned in the EU’s Markets in Financial Instruments Directive (MiFID), can do so seamlessly on Coinbase International. Similarly, U.S. traders who are subject to strict reporting requirements for large trades, known as Form 13F filings, can execute significant trades on the Bahamas-based exchange without these obligations.

Coinbase International's diverse offering includes perpetual contracts in altcoins like ETH and SOL, in addition to its flagship Bitcoin product. However, the yellow coin still claims a dominant 90% share of the volume, showcasing the strong preference of traders for the world’s largest cryptocurrency.

This strong interest in Bitcoin and the relatively lower volume in altcoins like ETH and SOL might be explained by the fact that traders are seeking safety and liquidity in times of market uncertainty.

As the S.P. 500 experiences a 20% correction, impacting traders’ stock portfolios, they are turning to alternative assets like cryptocurrencies for diversification and speculation.

Coinbase International, with its advanced trading technology and deep liquidity, becomes the stage for this dance between fear and opportunism as traders navigate the turbulence of the markets.

Recently, we've witnessed striking performances from both gold and bitcoin. As the dollar flounders and the S.P. 500 plummets, these two havens are displaying resilience. But is there a troubling correlation emerging?

Well, not exactly. Because there's a much more complex narrative unfolding, and it's a battle for narrative that will ultimately decide the fate of these assets.

The press often compares bitcoin to gold, highlighting the role of the yellow metal as a classic safe haven during times of economic distress. They describe bitcoin as “digital gold,” capitalizing on the familiarity of the term “gold” to introduce the cryptocurrency to a broader audience.

However, Coinbase International's staggering numbers tell a different story. While both assets have certainly benefited from the recent market turmoil, the sheer volume of bitcoin trading dwarfs that of gold and even surpasses the volume of many traditional markets.

In seven days, more than $100 billion flowed