Gemini to launch derivatives platform outside the United States
Are you looking for a new way to trade crypto derivatives? Do you want to access a platform that offers both spot and perpetual contracts? If so, you might be interested in Gemini Foundation, a new crypto derivatives platform launched by Gemini, one of the leading US-based crypto exchanges. 🚀
In this article, we will tell you everything you need to know about Gemini Foundation, including what it is, how it works, what are the benefits and risks, and how you can access it. We will also answer some of the most frequently asked questions about this platform. Let's get started! 😊
What is Gemini Foundation?
Gemini Foundation is a new division of Gemini, a crypto exchange founded by Tyler and Cameron Winklevoss in 2014. Gemini Foundation is an offshore platform that offers crypto derivatives trading to users outside the US. 🌎
Crypto derivatives are financial instruments that derive their value from an underlying asset, such as Bitcoin or Ethereum. They allow traders to speculate on the price movements of these assets without owning them directly. Some of the most popular types of crypto derivatives are futures and perpetual contracts. 📈
Futures contracts are agreements to buy or sell an asset at a predetermined price and date in the future. Perpetual contracts are similar to futures, but they have no expiration date and are settled in cash on a regular basis. Perpetual contracts are more flexible and liquid than futures, as they allow traders to adjust their positions according to market conditions. 💰
How does Gemini Foundation work?
Gemini Foundation offers two types of crypto derivatives: spot and perpetual contracts. Spot contracts are simply agreements to buy or sell an asset at the current market price. Perpetual contracts are agreements to buy or sell an asset at a fixed price that is adjusted by a funding rate every eight hours. The funding rate is determined by the difference between the spot price and the contract price, and it represents the interest paid or received by traders for holding their positions. 📊
The platform's first perpetual contract will be a Bitcoin (BTC) contract denominated in Gemini dollars (GUSD), followed by an Ethereum (ETH) contract shortly thereafter. GUSD is a stablecoin issued by Gemini that is pegged to the US dollar on a 1:1 basis. This means that fees, profits, and losses will also be processed in GUSD. The default leverage for trading on Gemini Foundation is set to 20x, with the maximum possible leverage at 100x. Leverage is a tool that allows traders to amplify their exposure to the market by borrowing funds from the platform. However, leverage also increases the risk of liquidation, which occurs when the market moves against the trader's position and their margin falls below a certain level. 🔥
To access Gemini Foundation, users need to register on the platform and verify their identity and location. The platform is available for users based in 30 countries, including Singapore, Hong Kong, India, Argentina, Brazil, South Africa, South Korea, Switzerland, Turkey, and more. However, it is not available for customers in the United States due to regulatory restrictions. 🚫
What are the benefits of Gemini Foundation?
Gemini Foundation offers several benefits for crypto derivatives traders, such as:
- Access to both spot and perpetual contracts on Bitcoin and Ethereum.
- Ability to trade with high leverage up to 100x.
- Use of GUSD as the base currency for fees, profits, and losses.
- High security and compliance standards from Gemini.
- Low fees and competitive funding rates.
- 24/7 customer support and education resources.
What are the risks involved?
As with any type of trading, crypto derivatives trading involves risks that traders should be aware of before entering the market. Some of these risks are:
- Market volatility: Crypto prices can fluctuate significantly in short periods of time due to various factors such as news events, supply and demand dynamics, technical analysis, etc. This can result in large profits or losses for traders depending on their positions.
- Leverage: While leverage can magnify gains, it can also magnify losses. Traders who use leverage should be careful to manage their risk and use stop-loss orders to limit their potential losses. They should also monitor the funding rate and the liquidation price of their positions to avoid being liquidated by the platform.
- Regulatory uncertainty: Crypto derivatives are not regulated by the CFTC in the US, and they may face different legal and tax implications in different jurisdictions. Traders should consult their local laws and regulations before using Gemini Foundation or any other crypto derivatives platform.
- Technical issues: Crypto derivatives platforms rely on complex technology and infrastructure to operate smoothly and securely. However, they may experience glitches, hacks, outages, or other technical problems that could affect the performance and availability of the platform and its services.
How will it affect the US market?
Gemini Foundation is a strategic move by Gemini to expand its global presence and reach new customers outside the US. The platform will compete with other crypto derivatives platforms such as BitMEX, Bybit, FTX, Binance, and more. 🏆
However, Gemini Foundation will not affect the US market directly, as it is not available for US customers. Gemini will continue to operate its US-based platform that offers spot trading, custody, lending, staking, and other services for US customers. Gemini is one of the most regulated and compliant crypto exchanges in the US, and it has obtained licenses and approvals from various authorities such as the New York State Department of Financial Services (NYDFS), the Financial Industry Regulatory Authority (FINRA), and the Securities Investor Protection Corporation (SIPC). 🇺🇸
Gemini Foundation is a separate entity from Gemini's US platform, and it will operate under different laws and regulations. Gemini Foundation will be registered in Bermuda and regulated by the Bermuda Monetary Authority (BMA). Gemini Foundation will also comply with the Financial Action Task Force (FATF) standards for anti-money laundering (AML) and counter-terrorism financing (CTF). 💯
The Bottom Line
Gemini Foundation is a new crypto derivatives platform launched by Gemini, one of the leading US-based crypto exchanges. The platform will offer both spot and perpetual contracts on Bitcoin and Ethereum to users outside the US. The platform will use GUSD as the base currency for fees, profits, and losses, and it will allow users to trade with high leverage up to 100x. 🚀
Gemini Foundation is a great opportunity for crypto derivatives traders who want to access a secure, compliant, and competitive platform that offers both spot and perpetual contracts. However, traders should also be aware of the risks involved in crypto derivatives trading, such as market volatility, leverage, regulatory uncertainty, and technical issues. Traders should do their own research and due diligence before using Gemini Foundation or any other crypto derivatives platform. 🙌
If you want to learn more about Gemini Foundation, you can visit their website here. You can also follow them on Twitter @Gemini for the latest updates and announcements. If you have any questions or feedback about this article, feel free to leave a comment below. We would love to hear from you! 😊
