Cryptocurrency exchange giant Binance is today launching Perpetual Futures contracts margined with Bitcoin with a leverage of up to 125x. According to a press release that was shared with Finance Magnates, the contracts are to be listed on Binance Futures, Binance’s cryptocurrency derivatives exchange arm.
The newest offering joins a number of other derivative products that Binance currently offers, including its USDT-margined perpetual futures. According to Binance, its “perpetual futures consistently owns the largest trading volume, with recent monthly market share averaging 37%.”
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The new BTC-managed perpetual futures product marks the second futures line to be margined and priced in a cryptocurrency. This follows Binance’s recent announcement of a new method of categorization that highlights whether a contract is margined with a cryptocurrency like BTC, or a stablecoin such as USDT.
Users May Have the Potential to Improve Their Margin Efficiencies
Changpeng Zhao commented upon the categorization announcement that “unlike with traditional markets, ‘inverse’ cryptocurrency contracts are intuitive because of the nature of digital assets. There are also traders who use coin-margined futures to hold cryptocurrencies for the longer term,” he added. “We should embrace these facts, as it helps strengthen our industry’s standing.”
For example:
- Binance’s COIN-margined futures contracts
- Quarterly Futures: quarterly expiration and settlement, with leverage of up to 125x
- Perpetual Futures: perpetual swaps with no expiration, with leverage of up to 125x
- Binance’s USDT-margined futures contracts
- Perpetual Futures: perpetual swaps with no expiration, with leverage of up to 125x
Binance claims that because Binance Futures allows users to offset their margin for COIN-margined quarterly and perpetual futures, users have the potential to improve their margin efficiencies.
Aaron Gong, VP of Binance Futures, said in a statement that “we are the only exchange that offers users flexible control of their margin balance by either spreading it across all their open positions or setting individual limits for each position they own (cross or isolate margin modes), as well as the ability to switch their margin modes at any time.”
Additionally, “our users can also choose to hold one direction (i.e. long or short) or both directions at the same time for hedging.”
Finance Magnates reported late last week that Trading volume on Binance Futures had increased by 25 percent month-over-month, growing from $87.6 billion in June to $109.4 billion in July. Binance Futures also recorded a new all-time daily high with more than $13 billion in volume traded on July 28th.