CBOE Set to Introduce Margin Futures Trading for BTC and ETH in January with Support from 11 Firms
Mitchell Nixon
The introduction of this new trading feature coincides with a notable increase in interest in cryptocurrency financial products in the United States.
Cboe Digital has disclosed the release date for BTC and Ether margin futures trading: January 11, 2024.
The regulated crypto-native exchange and clearinghouse will achieve a U.S. first by providing both spot and leveraged derivatives trading on one platform, according to an official statement.
Margin trading enhances capital efficiency by enabling users to engage in futures trading without the need for full collateral. The consolidation of spot and derivative trading on a single platform is expected to further enhance operational efficiency.
Cboe Digital’s President, John Palmer, remarked:
“We believe derivatives will foster additional liquidity and hedging opportunities in crypto and represent the next critical step in this market’s continued growth.”
Cboe Digital offers trading services for both individual and institutional clients. The new trading feature is supported by eleven firms, comprising both cryptocurrency and traditional financial entities such as B2C2, BlockFills, Cumberland DRW, and Talos, among others.
Having obtained approval for margin futures trading from the U.S. Commodity Futures Trading Commission in June, Cboe Digital received commendation from CFTC Commissioner Christy Goldsmith Romero for operating within traditional market structures and regulatory frameworks. The platform expresses intentions to venture into physically delivered products pending regulatory clearance.
The open interest in BTC futures has been experiencing a notable increase on the Chicago Mercantile Exchange, a direct competitor of Cboe Digital. In October, the CME emerged as the second-largest BTC futures exchange, trailing only behind Binance, and achieved a record high on November 3.
Simultaneously, the industry is anticipating a verdict from the Securities and Exchange Commission regarding 12 applications for spot BTC exchange-traded funds. The approval window spans eight days, commencing on November 9.