1. Bitcoin's role as collateral in crypto futures trading is expanding, with BTC-margined contracts now constituting 33% of total futures open interest, up from 20% in July.

2. The growth in BTC-margined contracts suggests a potential cash shortage in the market, as traders use their Bitcoin holdings to increase their exposure.

3. Utilizing Bitcoin as collateral in futures trading doubles exposure to price fluctuations and raises the risk of volatility-boosting liquidation cascades, where consecutive liquidations cause rapid price changes.

4. Coin-margined contracts, quoted in USD but margined and settled in cryptocurrencies, offer a non-linear payoff, potentially resulting in more substantial losses during market downturns.

5. Analysts caution that a higher dominance of coin-margined contracts may lead to more frequent liquidation cascades, impacting market security and stability. Such events were more #common before #September #2021 when these contracts represented over 50% of #global #open interest.