Margin trading enhances capital utilization efficiency by allowing customers to trade futures contracts without the need to deposit the entire collateral. The ability to execute spot and derivatives trading on the same platform will also increase efficiency.
John Palmer, the Chairman of Cboe Digital, stated:
“We believe that derivatives tools will drive liquidity opportunities and additional risk mitigation in cryptocurrencies and represent an important next step in the ongoing growth of this market.”
Cboe Digital provides trading services for individuals and organizations. Eleven companies, including cryptocurrency and traditional financial firms such as B2C2, BlockFills, Cumberland DRW, and Talos, will support the new service upon its launch.
Cboe Digital received approval for margin futures trading from the U.S. Commodity Futures Trading Commission (CFTC) in June. At that 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 plans to expand into physically delivered products, depending on regulatory approval.
Interest in Bitcoin futures contracts has surged on the Chicago Mercantile Exchange (CME), a competing platform to Cboe Digital. CME became the second-largest Bitcoin futures exchange after Binance in October, reaching record-high levels on November 3rd.
Meanwhile, the industry is awaiting decisions from the U.S. Securities and Exchange Commission (SEC) regarding 12 spot Bitcoin ETF registration applications. The eight-day approval deadline began on November 9th.