Apr 01, · Bitcoin futures real-time market data is available on MDP Channel , and Bitcoin futures historical data is available through CME DataMine. Additionally, real time-market data for the underlying BRR Index is available through MDP Channel during normal market hours, while also available 24/7 through CME DataMine’s Streaming Service. Once you are approved to trade futures, you still need access to /BTC to add bitcoin trading to your account. To request access, contact the Futures Desk at Jan 30, · Like a futures contract for a commodity or stock index, Bitcoin futures allow investors to speculate on the future price of Bitcoin. The Chicago Mercantile Exchange (CME) .
How to trade bitcoin cme futuresHow to Trade Bitcoin Futures: A Step-By-Step Guide
Nowadays, Bitcoin futures can be traded on a variety of regulated exchange platforms, in addition to a few unregulated ones. 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. According to the Bakkt FAQ , the platform is only accessible to trading participants with a type of registered futures broker known as a futures commission merchant FCM who is a clearing member of ICUS.
CME is well-known as the second regulated platform to launch regulated Bitcoin futures, back in December CME plans to introduce options for its Bitcoin futures in the first quarter of , adding additional flexibility in terms of managing risk. Like Bakkt, CME only offers futures trading during certain hours, these are p. Regular traders are also unable to directly trade on CME, instead, traders will need to open an account with a futures commission merchant who will be able to manage their portfolio.
As a derivative financial instrument, Bitcoin futures enable investors and traders to execute much more advanced, and potentially more effective investment strategies than simple spot trading. Learning how to trade Bitcoin futures is a relatively simple process, but truly mastering them will take practice.
They also enable several potentially profitable investment opportunities that are simply not possible with other Bitcoin derivatives, making them an ideal element in any well-rounded investment portfolio. Considered somewhat of an advanced investing strategy, hedging is the process of protecting an investment against a decline in value by creating another investment that will profit in a declining market.
For example, if an investor holds BTC and wants to protect themselves against losses during a bear market, they could short BTC with Bitcoin futures , such that any losses on their spot position will be neutralized by profits made on the futures.
Since many Bitcoin futures exchanges offer up to x leverage , the investor would be able to essentially eliminate risk using only 1 BTC in collateral. This strategy can be employed by anybody looking to minimize their exposure to price risk, protecting their long positions against any unexpected downturns. This can include Bitcoin miners, businesses that accept Bitcoin payments, long-term holders and.
Bitcoin is widely considered to be one of the best speculative assets since the potential for upside profits is high, while its volatility makes shorting and day-trading potentially hugely profitable for experienced traders. Likewise, Bitcoin futures allow even more people to benefit from the high risk, but high reward Bitcoin markets.
As the account is depleted, a margin call is given to the account holder. However, cryptocurrency exchanges face risks from hacking or theft. Prudent investors do not keep all their coins on an exchange.
They use cold storage or hardware wallets for storage. Now with Bitcoin futures being offered by some of the most prominent marketplaces, investors, traders and speculators are all bound to benefit. Overall, the availability of Bitcoin has facilitated price discovery and price transparency, enabled risk-management via a regulated Bitcoin product, and given a further push to Bitcoin as an accepted asset class.
CME Group. Cboe Global Markets. Accessed April 18, Cboe Futures Exchange. Financial Futures Trading. Metals Trading. Your Money. Personal Finance. Your Practice. Popular Courses. Bitcoin Guide to Bitcoin. Cryptocurrency Bitcoin. What Are Bitcoin Futures? Key Takeaways: As with a stock or commodities futures, Bitcoin futures allow investors to speculate on the future price of Bitcoin.
CME offers monthly Bitcoin futures for cash settlement. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
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