The Commodity Futures Trading Commission (CFTC) plans to introduce leveraged spot cryptocurrency trading in the U.S., with Acting Chair Caroline D. Pham spearheading the initiative. The targeted launch date for Bitcoin and Ethereum trades is December 2025.
This regulatory change is designed to enhance the sophistication and liquidity of the U.S. crypto market. However, it also carries the potential to increase volatility and systemic risks, which could impact both institutional and retail investors.
CFTC to Integrate Leveraged Crypto Trading by December 2025
Under the leadership of Acting Chair Caroline D. Pham, the CFTC has confirmed its plans to integrate leveraged spot crypto trading by December 2025. This represents a significant regulatory shift with potentially far-reaching market consequences.
Caroline D. Pham, who focuses on the oversight of digital asset markets, is leading this initiative in collaboration with the SEC's Project Crypto. The move involves discussions with major exchanges, including CME, ICE, and Coinbase.
Leveraged Trading Expected to Boost Liquidity and Volatility
The introduction of leveraged crypto trading is anticipated to boost both market liquidity and volatility. This initiative could enhance the U.S. market's competitiveness while simultaneously introducing potential risks of systemic fragility due to the use of leverage.
This strategy is expected to deepen market engagement from institutional players, potentially influencing financial ecosystems, market regulations, and digital asset trading practices within the U.S.
Comparisons Drawn with 2017 Bitcoin Futures Launch
Comparisons are being made to the 2017 launch of Bitcoin futures by CME and CBOE. That event helped legitimize institutional engagement with cryptocurrency and led to increased trading volume, although it also contributed to heightened volatility.
The upcoming launch may result in increased trading volume and market sophistication, mirroring previous instances. It will necessitate robust risk-management strategies to mitigate associated volatility risks and to capitalize on potential growth opportunities.
Enabling immediate trading of digital assets at the Federal level is a top priority. This move, in coordination with the SEC’s Project Crypto, answers the administration’s call to action for American leadership.
Caroline D. Pham, Acting Chair, CFTC