Cboe Digital, the cryptocurrency division of the Chicago Board of Options Exchange, is set to launch margined futures for Bitcoin (BTC) and Ether (ETH) starting January 11. This development follows the June approval from the Commodity Futures Trading Commission (CFTC) for these products. Cboe Digital’s introduction of these futures positions it as the first regulated exchange in the United States to offer both spot and futures markets on a single platform.
Margined futures are distinct from regular futures in that they allow traders to leverage their positions, enabling them to hold a stake that exceeds their collateral’s value. The introduction of these products is supported by a range of notable trading firms, including B2C2, BlockFills, CQG, Cumberland DRW, Jump Trading Group, and Marex. This collaboration underlines the industry’s growing interest and confidence in the potential of cryptocurrency derivatives.
John Palmer, President of Cboe Digital, expressed enthusiasm for the new offering. He noted that futures have traditionally been key hedging tools in financial markets, and the extension of these instruments into the digital asset markets opens new avenues for liquidity and hedging opportunities. Palmer emphasized that the introduction of derivatives like these is a vital step in the maturation and expansion of the cryptocurrency market.
This move comes after Cboe Digital’s strategic maneuver last August when it enlisted several crypto industry leaders as equity partners following the acquisition of the ErisX trading platform. The initiative marks a significant milestone in the broader integration and acceptance of cryptocurrencies within traditional financial market structures.
Cboe Digital’s move into margined futures trading arrives on the heels of its competitor CME’s earlier foray into Bitcoin futures in December 2017. Notably, the listing of Bitcoin futures on CME coincided with the cryptocurrency reaching a peak value of $20,000, followed by a sharp decline to $6,000 in the following months, showcasing the high volatility and dynamic nature of the crypto market.