One of the top US stock exchanges, Cboe Global Markets, revealed on November 15 that it will begin offering margin futures for Bitcoin and Ether in January 2024.
The company’s bitcoin division, Cboe Digital, will be the trading platform for these futures. They will be available in contracts with a monthly expiration that consist of one bitcoin and one ether.
With margin futures, investors can make price predictions about cryptocurrencies without actually holding any of them. To start a position, investors must deposit collateral, which will be used to cover their losses in the event that the price of the cryptocurrency declines.
These futures’ introduction marks a significant turning point for the cryptocurrency industry. Since Cboe is a licensed stock exchange, the futures will be governed by the same laws and guidelines as other financial instruments. This might draw more institutional money to the cryptocurrency space.
Possible effects of the launch
The bitcoin market may be significantly impacted by the introduction of Cboe’s margin futures. It might:
Boost market liquidity to potentially facilitate the buying and selling of cryptocurrencies by investors.
Provide institutional investors with fresh investment alternatives.
Amplify market volatility since investors could use leverage to bet on cryptocurrency prices.
Additional stock exchanges that provide margin futures
Other stock exchanges that provide cryptocurrency margin futures in addition to Cboe are:
CME Group Evaluates ErisX
Institutional investors as well as individual investors can purchase these futures.
