The new trading capability comes simultaneously with a surge in interest in crypto financial products in the United States.
Cboe Digital has announced the launch date of Bitcoin (BTC) and Ether (ETH) margin futures trading – Jan. 11, 2024. The regulated crypto-native exchange and clearinghouse will become the first in the United States to offer both spot and leveraged derivatives trading on a single platform, it said in a statement.
Margin trading increases capital efficiency by allowing customers to trade futures without posting full collateral. The ability to carry out spot and derivative trading on the same platform will also increase efficiency.
Cboe Digital president John Palmer said:
“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 provides trading for individuals and institutions. Eleven firms, including crypto and traditional financial firms, will support the new capability from its launch. They include B2C2, BlockFills, Cumberland DRW and Talos, among others.
Related: Talos raises $105M to become the latest crypto unicorn valued at $1.3B
Cboe Digital received approval for margin futures trading from the U.S. Commodity Futures Trading Commission (CFTC) in June. At the time, CFTC Commissioner Christy Goldsmith Romero praised Cboe Digital for “operating within the parameters of the traditional futures market structure and regulatory framework.”
Cboe Digital said it plans to expand into physically delivered products eventually, subject to regulatory approval.
Cboe Digital to adopt a Default Liquidity Incentive Program, in effect as early as November 17⚠️ pic.twitter.com/NlSC0xH8Ff
— M.B. (@741trey) November 8, 2023
BTC futures open interest has been surging on the Chicago Mercantile Exchange (CME), which is a Cboe Digital competitor. The CME became the second-largest BTC futures exchange after Binance in October, and it hit a record high on Nov. 3.
Meanwhile, the industry is waiting for a decision from the Securities and Exchange Commission decision on 12 applications for BTC spot exchange-traded funds. The eight-day window for approvals began on Nov. 9.
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