Coinbase Is Adding Perpetual Futures to Its Base App. Here's What Crypto Investors Need to Know.

On Aug. 19, Coinbase Global (NASDAQ: COIN) launched perpetual futures trading inside its Base App, giving eligible users up to 50x leverage across the platform's crypto and tokenized equity markets. The backend of that new feature will be handled by Hyperliquid, a popular and rising decentralized crypto derivatives exchange. That same day, nearly $3 billion in leveraged crypto positions were liquidated, the biggest single-day wipeout since the flash crash of early October 2025.

Those two events are connected. In fact, Coinbase's rollout of perpetuals guarantees that the market will see even more volatility than before -- here's what you should know if you're a crypto holder trying to make sense of what the impact will be.

Image source: The Motley Fool.

This is a good move for Coinbase

A perpetual future (or "perp" for short) is a type of financial derivative contract that tracks an asset's price and never expires. Because they are nearly always traded using leverage, they're a handy way to boost an investor's exposure to the price movement of an underlying asset. Coinbase says perps trading currently drives 75% of overall crypto trading volume.

But excessive use of leverage has been a major contributor to financial crashes throughout history. Because applying leverage means borrowing money to squeeze higher returns out of smaller price movements in the underlying asset, investors must provide the exchange with margin to use as collateral for the borrowing, which has consequences.

Someone making a spot trade might want to sell a cryptocurrency if it loses 10% of its value, which would recoup 90% of their starting capital before any fees. Or they could decide to hold on through the dip, and eventually sell their position at a profit; the price of the coin alone cannot force them to take any action.

On the other hand, if a trader with a 10x leveraged perpetual futures position in the same asset experiences a drop of a little under 10% in price, their position will be automatically liquidated by the exchange, costing them the entire margin backing that position, which also excludes them from the upside of the asset's recovery, if one occurs.

And in both of those scenarios, Coinbase and Hyperliquid capture transaction and trading fees while avoiding most of the primary investment risks.

Perpetuals are hard to access in the U.S. for now

Perpetuals in Coinbase's Base App are currently unavailable in the U.S., the U.K., and Canada, though Americans who want to access leveraged trading on Coinbase's main platform already have it, albeit with a 10x leverage cap.

That may change soon enough, given that crypto regulations in the U.S. are currently being overhauled. If it does, more investors will have access to a lot more leverage than before.

Volatility is sure to follow, as smaller sums of capital will be able to make much larger impacts relative to a crypto's market cap than before. That doesn't mean you need to trade perpetuals using lots of leverage in Coinbase's app or anywhere else. They're simply too risky for most investors to bother with.

Owning Coinbase stock, or Hyperliquid's coin, will be sufficient to capture some of the upside of its new perpetuals offerings. Just be aware that as the contracts get more and more popular, the market could be in for a bumpy ride even if the direction of travel is favorable.

Alex Carchidi has positions in Hyperliquid. The Motley Fool has positions in and recommends Hyperliquid. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.