The dog-themed crypto asset Dogecoin (DOGE) is surging after Coinbase announced its plans to launch futures trading for the memecoin.
According to a filing from Coinbase earlier this month, the top US crypto exchange platform has registered with the Commodity Futures Trading Commission (CTFC) to offer DOGE derivatives starting April 1.
“In accordance with the Commodity Futures Trading Commission, hereby submits for self-certification the initial quotation of the Dogecoin futures contract to be offered for trading on the exchange on or after April 1.”
News of Coinbase’s plan to offer DOGE futures sent the meme assets skyrocketing, from a March 20 low of $0.129 to a high of $0.155, a 20% increase. DOGE has since retreated and is trading at $0.152 at the time of writing, up about 15% over the last 24 hours.
According to Bloomberg analyst James Seyffart, the US Securities and Exchange Commission (SEC) – which has jurisdiction over securities and not commodities – may object to Coinbase’s plan, even though it would be difficult to argue that DOGE futures would count as securities.
“This is interesting… I wonder if the SEC would object to these being classified as ‘commodity futures’ versus ‘security futures’. These all come from Bitcoin, so ‘these are securities’ would be difficult to make after approval of the Bitcoin ETF. Maybe this is why Coinbase chose them.”
In the filing, Coinbase says Dogecoin’s inflation mechanism makes it ideal to act as the currency of the internet because it encourages spending rather than holding.
“Unlike Bitcoin or Litecoin, Dogecoin has no limit on the total supply of coins. There are over 140 billion Dogecoins in circulation, with new blocks added to the Dogecoin blockchain every minute and a reward of 10,000 DOGE per block.
This design leads to an inflationary supply model, which contrasts with the deflationary model of Bitcoin and many other cryptocurrencies. The inflationary nature of Dogecoin is intended to encourage spending and use of tips on social media and online forums, rather than holding it as a digital investment.”
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Generated image: Midjourney