Dec 31, · In response to growing interest in cryptocurrencies and customer demand for tools to manage bitcoin exposure, CME options on Bitcoin futures (BTC) are now trading. The value of options on Bitcoin futures is based on the regulated CME CF Bitcoin Reference Rate (BRR) and settles into actively traded Bitcoin futures. May 07, · Averaging more than $5 Billion in daily trading volume, futures are one of the most liquid instruments to trade Bitcoin. Popular Bitcoin futures exchanges like Bitmex, Deribit, and FTX enable its users to long or short BTC with up to x leverage. Next Level Trading with Cryptocurrency Futures Bitcoin and digital assets are volatile investments. Many traders attempt to manage their risk simply by buying an asset when the price drops or selling it when the price goes up. The downside of this tactic is that oftentimes money is .
Trade futures on bitcoinHow to Trade Bitcoin Futures: A Step-By-Step Guide
The great majority of Bitcoin futures are settled in cash, though an increasing number of platforms are beginning to offer physically-settled Bitcoin futures, which means they pay out BTC upon settlement. This can likely be attributed to the fact that at least initially, all Bitcoin futures were regulated by the Commodity Futures Trading Commission CFTC , making them much more attractive to institutional investors and hedge funds.
Similarly, Bitcoin futures also act to help to reduce the price volatility of what can otherwise be considered a volatile asset through more efficient price discovery. Although Bitcoin futures are widely acknowledged as a boon for the Bitcoin markets, they have often been met with criticism. For one, some argue that Bitcoin futures actually negatively influence BTC markets through price manipulation.
Likewise, because many Bitcoin futures are actually traded in and settled in cash, it can be argued that Bitcoin futures actually reduce the liquidity of the underlying Bitcoin market. This might not be the case for long, however, since physically-delivered Bitcoin futures are now available from Bakkt. With any Bitcoin futures contract, there is a buyer that agrees to sell BTC at a certain price on a certain date, and a buyer that agrees to buy it at that price on that date.
On the flip side, traders that want to short Bitcoin would want to be the seller on a contract that settles at higher than the current price of BTC. Four of the most well-reputed options are outlined below.
BitMEX is one of the most popular Bitcoin futures platforms in operation and today and has become somewhat of a tour-de-force in the cryptocurrency space. Part of the reason BitMEX is so popular is due to its accessibility.
Despite being unregulated, BitMEX operates easily one of the largest insurance funds of any Bitcoin futures trading platform—whether regulated or not. To begin, create an account on the platform and click the verification link you will be emailed. Launched back in , Deribit was one of the first exchanges to offer Bitcoin futures and still remains one of the most popular Bitcoin futures exchanges today. Unlike BitMEX which offers futures for several different cryptocurrencies, Deribit has a sole focus on Bitcoin futures.
As it stands, Deribit offers two Bitcoin futures contracts—one short term and one medium-term expiration. Besides offering Bitcoin futures with two different expirations, Deribit also offers a Bitcoin perpetual swap product, which has no defined expiration date and differs from traditional Bitcoin futures in a few other ways.
Deribit is known for its impressive liquidity, making entering and exiting positions a painless process. Like all good Bitcoin futures trading platforms, Deribit also maintains an insurance fund that should cover the losses of any bankrupt traders.
As far as derivatives trading platforms go, Deribit is also one of the simpler to use, making it ideal for those first getting to grips with trading Bitcoin futures. To begin buying and selling Bitcoin futures on Deribit, you will first need to create an account and verify it. Once verified, login, click your username on the top right and select the deposit option. Here you will find your deposit address, use this to load your account with the BTC you will use for trading.
Once selected, the trading panel will be loaded at the bottom of the page, where you will be able to set the number of contracts to buy and choose whether to buy or sell. Although BitMEX and Deribit are designed for both casual and professional traders, there are also a number of Bitcoin Futures trading platforms that are designed with institutional customers in mind.
Nonetheless, as two prominent platforms that are directly involved in shaping the Bitcoin market, it is important to understand what Bakkt and CME are and what they offer. This is in contrast to most other Bitcoin futures exchanges, which settle Bitcoin futures in cash. Bakkt only allows trading during certain hours, these are p. EPT to p. EPT, Sunday to Friday. Credit Card. Debit Card. Pros Lowest trading fees.
Ease of Use. Payment Methods Cryptocurrency. Bank Transfer. Bank Wire. Pros Trade all DeFi tokens. Cons Leveraged tokens can be risky for new users. Payment Methods Bank Transfer. Pros Clean mobile trading app. Cons Not a wide range of pair. Pros Competitive fee structure. Cons Confusing user interface. Cons Not the best option if you are looking to strictly trade crypto futures. Pros x leverage futures contracts. Cons Relatively new futures exchange. Highly liquid Bitcoin spot and derivatives exchange OKEx is leading Bitcoin and cryptocurrency exchange that offers hundreds of token and futures trading pairs to enable traders to get access to a variety of tools to optimise their cryptocurrency portfolio or trading strategies.
Pros One of the most liquid exchanges. Cons Confusing interface for first time traders. World leading one-stop digital asset service BitForex are a well renown exchange the offer Bitcoin spot trading as well as Bitcoin futures trading and other cryptocurrency futures contracts.
Payment Methods Bank Wire. Pros Bitcoin futures trading and spot trading. Cons Fees are higher than industry standard. Payment Methods Bitcoin.
Pros Futures and options contracts. Cons Complicated user interface, built for institutional traders. Physically settled crypto futures trading CoinFlex are one of the first physically settled Bitcoin and crypto futures trading platforms in the space.
Pros Physically settled crypto futures trading. Cons Relatively new exchange in Singapore. Trade over cryptocurrencies against USD Launched toward the end of , Liquid Exchange offers a crypto futures trading platformed that is tailored for both new and expert users.
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