There is a piece of news today, I think I have to talk about it.

The U.S. CFTC has approved BTC, ETH, and USDC to be used as collateral in the derivatives market.

Many people may think - oh, another good news.
Wrong.

This time is different.

This is the first time that the traditional financial system has officially recognized that crypto assets can be used as collateral.

What is the concept of collateral? It is not that you can buy, sell and speculate, but that this thing is recognized as a "high-credit asset", a "financial infrastructure-level thing", and a "underlying collateral that can leverage larger funds".

In other words: US officials now recognize BTC, ETH, USDC = a new generation of qualified collateral assets.

This may be one of the lowest and most fundamental breakthroughs in the crypto world so far.

Why is "collateral qualification" more critical than ETFs?

ETF means – allows investment.
Collateral means - allowing the financial system to use you for leverage.

The difference between the two is too great.

For a quick comparison:

If you are just a "tradable asset", then you are a buying and selling tool, and retail investors are just playing.
If you can make an ETF, it means that institutions can invest in you, and you are a "qualified investment product".
But if you can do collateral? Then you are at the level of "financial infrastructure" - you can leverage derivatives, credit systems, leverage, clearing, and the whole chain can use you.

What does it mean to be able to use it as collateral?

It shows that the risk model recognizes you, the volatility is within a controllable range, settlement can be expected, the liquidity is deep enough, and the institution is willing to allocate you for a long time.

Previously, only two types of assets could achieve this status: Treasury bonds and gold.

Now there are three more on the list: BTC, ETH, USDC.