BTC Use as Margin Collateral in Crypto Futures Trading Is Growing

Futures are leveraged products, allowing traders to maximize exposure for a deposit at the exchange, known as margin, which is a small percent of the contract size. The exchange provides the rest of the value of the trade. The renewed interest in BTC-margined contracts means potential for volatility-boosting liquidations cascades, according to research provider Blockware Intelligence. That occurs when multiple liquidations – or forced closure of positions due to margin shortage – happen consecutively, causing a rapid price change.

Source: https://www.coindesk.com/markets/2023/09/04/bitcoins-use-as-margin-collateral-in-crypto-futures-trading-is-growing/?utm_medium=referral&utm_source=rss&utm_campaign=headlines