Coinbase said that it is purchasing FairX, a crypto futures exchange, as part of a plan to offer crypto derivatives to traders in the United States.

LMX Labs' operating name is FairX, which was launched last year. It is regulated by the US Commodity Futures Trading Commission and sells futures products (CFTC).

Retail and institutional users will be able to trade regulated crypto futures, according to Coinbase.

It said in a blog post on Wednesday that "the emergence of a transparent derivatives market is a vital inflection point for any asset class, and we believe it will unleash broader involvement in the crypto economy for retail and institutional investors alike."

Since institutional investors began to embrace digital coin trading during the last 18 months, trading of cryptocurrency derivatives has exploded, creating huge prospects for platforms that offer futures and options.Coinbase buys crypto futures exchanges, plans to sell derivatives in U.S

According to UK research firm CryptoCompare, crypto derivatives sales totaled $3.3 trillion in November, representing nearly 55% of the total crypto market.

Crypto futures and options, particularly those offered by regulated platforms, are largely regarded as being less dangerous than buying and selling cash.

That makes them more tempting to institutional investors seeking exposure to cryptocurrencies, many of whom are weighing the allure of quick profits with the lingering risks in the nascent market.

The transaction is scheduled to finalize in the first quarter, according to the business.

Coinbase's stock fell 1% on Wednesday after posting its first day of net gains this year on Tuesday, reaching a high of $246, albeit it is still down approximately 39% since going public in April of last year.

In premarket trade, shares were up nearly 3% at $241.20.

As bitcoin plummeted below $40,000 earlier this week, shares in blockchain-related companies fell. It is still much behind its all-time high of $69,000 set in November of last year.