Onshore Bitcoin perpetuals will cap borrowing at a fraction of what offshore venues allow

Bitcoin perpetual contracts are coming to CFTC-regulated venues, and the borrowing caps that come with them will be a sharp contrast to what traders find offshore. Mike Selig, who works with clearing houses on these products, said onshore offerings will allow traders to borrow “5 to 7, maybe getting up to 10x” against their positions. Offshore markets routinely go well beyond that ceiling.

We work with the clearing houses and with the Bitcoin perpetuals and some of these products, expect to see 5 to 7, maybe getting up to 10x leverage, but nothing like you're getting offshore. Mike Selig

That gap is not incidental. The CFTC framework, by Selig’s account, is designed to be conservative precisely because it is durable. He pointed out that the agency has not approved a new class of derivative instrument in over a decade, signaling that when new products do clear the bar, the oversight structure around them tends to be substantive.

The FTX collapse offered a pointed illustration. Selig noted that the CFTC-regulated arm of the exchange was “the only one that was safe,” while the unregulated parts of the business failed. For traders weighing the tighter borrowing limits of an onshore perpetual, that track record is the relevant context.