Recently, the Chicago Mercantile Exchange's CME Bitcoin futures surpassed Coin An for the first time, and the continuous growth of institutional demand has attracted market attention. On this occasion, CboeDigital, a subsidiary of the Chicago Board of Options (CBOE), which was the first to launch Bitcoin futures in December 2017, announced plans to launch a margin futures trading and settlement business based on Bitcoin and Ethereum on January 11, 2024
Recently, the Chicago Mercantile Exchange's CME Bitcoin futures surpassed Coin An for the first time, and the continuous growth of institutional demand has attracted market attention. On this occasion, CboeDigital, a subsidiary of the Chicago Board of Options (CBOE), which was the first to launch Bitcoin futures in December 2017, announced plans to launch a margin futures trading and settlement business based on Bitcoin and Ethereum on January 11, 2024. It will become the first regulated cryptocurrency native joint exchange and clearing house in the United States, allowing spot and leveraged derivative trading to take place on the same platform.
CboeDigital is the only crypto exchange registered in the United States that offers spot trading on BTC, ETH, BCH, LTC, and USDC, with a primary customer base of professional or institutional participants. In addition, the company also has a clearing house under its umbrella. CboeDigital's predecessor was ErisX, a regulated crypto derivatives exchange and clearing house that was renamed after being acquired by CBOE for $460 million in May 2022.
In fact, CBOE, the parent company of CboeDigital, had already laid out the crypto derivatives market several years ago. During the Bitcoin bull market in December 2017, CBOE was the first to launch Bitcoin futures trading with the code "XBT". The product triggered circuit breakers multiple times on its first day of launch due to its popularity. However, as Bitcoin prices continued to decline, CBOE announced the closure of Bitcoin futures trading in 2019, leading to a dismal end for the first Bitcoin futures product. In response, CBOE has explained, "We need to re-examine how to enter this field and do not plan to add XBT futures contracts to its futures market before taking the next step, but we cannot rule out the possibility of issuing other cryptocurrency derivatives
CboeDigital is the "weapon" for CBOE to return to the crypto and derivative markets, and has also received support from institutions such as DRW, Fidelity Digital Asset, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, and Robinhood. In June of this year, CboeDigital obtained approval from the US Commodity Futures Trading Commission (CFTC) to provide margin contracts settled in both physical and financial terms from the second half of the year, and is now officially launching its first related product.
According to CboeDigital, compared to the no margin futures model, the upcoming Bitcoin and Ethereum margin futures trading can provide higher capital efficiency, and supporting both spot and derivative trading will provide investors with additional opportunities to improve their capital and operational efficiency. Meanwhile, to enhance transparency, CboeDigital plans to publish daily margin requirements and provide standardized risk parameter files.
This product aims to supplement CBOEDigital's existing encryption product suite and incentivize broader institutional participation by providing familiar transaction mechanisms. However, at present, CboeDigital only supports cash settlement settlement settlement methods, and physical settlement products still need to be approved by regulatory authorities.
At present, CboeDigital's margin futures products have received support from multiple cryptocurrency and traditional financial institutions, including Cumberland DRW, JumpTrading Group, B2C2, BlockFills, CQG, Marex, StoneXFinancial, Talos, Trading Technologies, and Wedbush.
Futures have always been an important hedging tool in traditional financial markets, further expanding into the cryptocurrency market and providing margin trading for our clients. We believe that derivative products will promote additional liquidity and hedging opportunities for cryptocurrencies, which represents the next key to the sustained growth of the market, "said John Palmer, President of CboeDigital.
Chris Zuehlke, Global Director of Partner Cumberland DRW, stated that "CboeDigital's services in providing secure access to regulated futures markets are crucial for the maturity of this emerging asset class and achieving broader institutional engagement
Bob Fitzsimmons, Executive Vice President of Wedbush Securities, believes that CboeDigital has played an important role in helping to promote the establishment of a transparent and well regulated cryptocurrency spot and derivative market.
In short, CboeDigital's launch of margin futures trading signifies an important step towards standardizing the market for crypto assets and will accelerate the transition of crypto assets to mainstream finance.
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