On June 5, Cboe Global Markets secured a much-coveted license to offer margined Bitcoin and Ether futures contracts to its crypto clients. As one of the early pioneers for Bitcoin futures contracts, this development creates a buzz in the crypto market. Following approval from the U.S. Commodities and Futures Trading Commission (CFTC), Cboe will roll out physical and financially-settled margined contracts starting in the latter half of this year.
Previously, Cboe only offered fully collateralized trading of crypto futures, which required clients to put up the entire amount of a contract before trading. With the new margined trading facility, traders can now enter a position with less capital upfront. This could potentially ease entry barriers for those interested in the market.
Simultaneously, the physical settlement of crypto assets opens the door for traditional firms to access Bitcoin and Ether futures without necessitating custodial requirements from intermediaries. Cboe Digital President John Palmer elucidates the benefits of not having to force participants to custody or touch physical assets.
In addition, Cboe Digital will continue to offer spot trading under the same entity. As a registered exchange in the United States, Cboe Digital provides trading services for digital assets such as Bitcoin, Bitcoin Cash, Ether, Litecoin, and USDC. By offering both spot and derivatives trading options for these assets while operating a clearinghouse, Cboe Digital distinguishes itself as the sole platform with such features.
With plans to expand the number of tokens trading on its platform, Cboe’s margined contracts will necessitate the use of an independent futures commission merchant as an intermediary. This move comes amidst recent regulatory crackdowns on the digital asset space. On June 5, the SEC posed a lawsuit on the Binance crypto exchange, which currently holds over $115 billion of digital assets.
Cboe primarily serves professional and institutional traders, catering to top clients such as DRW, Galaxy Digital, Interactive Brokers, and Robinhood Markets Inc. While the current market conditions and SEC’s firm stance on digital assets may instill skepticism, this latest development presents attractive opportunities for traders and traditional firms alike. Before investing in cryptocurrencies, thorough market research remains crucial to avoid personal financial loss.
Source: Coingape
