Cboe Digital to launch Bitcoin and Ethereum margin futures trading in January

Cboe Digital, a subsidiary of Cboe, announced that it will offer regulated Bitcoin and Ethereum margined futures trading to customers starting in January next year. [source]

Cboe Digital Allows Customers to Trade Spot and Margin Futures on Regulated Platform

Cboe Global Markets, known as Cboe, is a U.S.-based securities and commodities exchange headquartered in Chicago, providing trading, clearing, and investment solutions to global market participants. Its products cover various asset classes, including stocks, derivatives, forex, digital assets, and operates in North America, Europe, and the Asia-Pacific region. Cboe is also a leader in volatility trading, with its Cboe Volatility Index VIX Index, commonly known as the "fear index," being a core product of Cboe.

In May 2022, Cboe completed the acquisition of Eris Digital Holdings, obtaining qualifications for cryptocurrency spot trading, derivatives, and clearing, and renamed it Cboe Digital. Minority stakes in Cboe Digital are held by Galaxy Digital, Jane Street, and Robinhood.

In June of this year, Cboe Digital received approval from the CFTC to offer leveraged derivative products on its digital trading platform, Cboe Digital, including physically and cash-settled Bitcoin and Ethereum margin futures contracts.

The Chicago Options Exchange currently offers spot trading for Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USDC.

Cash-Settled Margin BTC and ETH Futures Trading to Open in January Next Year

Cboe Digital plans to launch BTC and ETH margin futures trading and clearing on January 11, 2024, but the current settlement method is cash-settled because "physically settled products still require regulatory approval."

Margined trading is a financial market trading model that uses leverage to amplify positions. Margin trading is similar to the contract trading commonly seen in the crypto market, using leverage to amplify positions. However, Cboe's margin trading is based on futures products with specific futures contracts as the underlying, unlike perpetual contracts in the crypto market that have no expiration date. The principle is the same, allowing leverage with a small amount of funds to increase potential returns, but if the market turns unfavorable, traders may face margin calls or forced liquidation, significantly increasing risks.

The margin futures planned to be launched by Cboe Digital will be supported by various cryptocurrency and traditional financial institutions, including Cumberland DRW, Jump Trading Group, B2C2, BlockFills, CQG, Marex, StoneX Financial, Talos, tastytrade, Trading Technologies, and Wedbush.

President of Cboe Digital, John Palmer, stated:

Futures have always been an important hedging tool in the traditional financial markets, and we are very excited to further expand this tool to the digital asset market and provide margin trading to our customers. We believe that derivative products will promote additional liquidity and hedging opportunities for cryptocurrencies, representing the next key to the continued growth of this market.