Bitcoin futures: features and perspectives

The idea of the futures lies in the previously arranged contract terms… how are futures applied in bitcoin trade?.. here is the information on how the futures work in a simple and understandable way

EXMO news

Bitcoin futures: features and perspectives


The interest to BTC futures is growing day by day, which means that both traders and cryptocurrency market players need not only to understand what futures are but also acknowledge the perspectives of its use. It is essential to evaluate the specific features of the futures-contract and its application in the quality of trading instrument for bitcoin.

We have already discussed the basics and meaning of the futures-contract, and also the peculiarities of its application on the traditional exchanges. The application of the futures in bitcoin trade suggests not the actual purchase/sale of BTC but the influence on cryptocurrency rate fluctuations through changing the demand for it. Read more about it in the article “Bitcoin futures: what’s the matter?”.

The bitcoin futures perspectives

In 2017 people could have heard about so-called crypto-businessmen trying to establish bitcoin trade within traditional (stock) exchanges (not cryptocurrency but product, currency, and other exchanges). If bitcoin was one of the accepted exchange assets, that would definitely enhance its “legitimacy” in the financial and legal domains contributing to the overall rate increase. In the long-term perspective, the establishment of bitcoin on the traditional exchanges induces the new opportunities for the other cryptos.

Futures contract based on bitcoin sale/purchase does not imply the actual transfer of BTC. BTC purchase/sale with its further transfer to one’s wallet is only possible with the help of cryptocurrency exchange.

The regulators did usually appreciate such plans with little enthusiasm. As a result bitcoins could be sold only within cryptocurrency markets. In any case bitcoin was still a potential asset. The American regulators did understand this fact very well. All in all, they were made to allow a bitcoin-futures trade. Undoubtedly, this is a considerable achievement of crypto-community contributing to a complete acknowledgment of bitcoin as exchange asset and digital currency.

Bitcoin establishment on the traditional exchanges opens up opportunities for other cryptocurrencies in the long-term perspective.

The first exchanges to start trading with bitcoin futures were CBOE (Chicago Board Options Exchange), and CME Group (exchange aimed to trade with commodity derivatives). Tokyo financial exchange (TFX) will introduce bitcoin futures trade in January 2018.

The limited futures trade was organized in Switzerland in November 2017. However, the futures operations were provided not by the exchanges but Vontobel bank, and Man Group investment fund.

Bitcoin futures trade was launched on CBOE on the 10th of December, 2017, and on the CME - on the 18th of December. It is not surprising that the bitcoin rate rapid growth was a reaction to the great news from the United States

Pros and cons of bitcoin futures trade


We have already partially discussed the pros of futures as a trading instrument. The holders of the material assets appreciate the price stability that can be know for sure in advance. These people choose futures contracts in the quality of a coverage form from unfavorable prices that could appear in the future. Traders with significant amount of trading funds (or requests for security needs) find it more important to trade the assets like bitcoin on the platform with high liquidity and opportunity to not keeping clients’ cryptos as it does.

Though bitcoins on the exchanges like CBOE are “drawn” in course of trade they are no more than “numbers in the contract”, and do not exist in reality. CBOE is not an appropriate variate for those, who have decided to make long-term and solid investment in bitcoin.

The application of the trade derivative instruments on the full-circle exchanges is also essential due to it provides traders, who are prone to rate manipulations till its rise, or drop, with loads of financial opportunities. The milliardth contracts, which have been made on the stock exchanges in bear campaigns, can induce a serious panic on the cryptocurrency platforms, and decrease bitcoin rate for a long time. However, it is no more than a possibility, which can be beared out in practice with poor likelihood.

It is important to mention that the main disadvantages and also peculiarities of the futures contracts are poor stability and high level of risk. With that the traditional futures contracts on the stock, currency, and optional exchanges are liquid, and perspective derivatives. This fact is also backed by the interest of the crypto-community and universal exchanges to the stated type of the forward-contracts as the initial instrument for bitcoin trade on the traditional exchanges.

Make sure to follow our updates on EXMO official website and through the official channels: Telegram, Facebook, Twitter, and by emails.

Visit EXMO Youtube channel to find out useful information on cryptocurrencies and trading on the platform.

Additional materials that may help you:
Reach more profit on EXMO – gain 25% more
Bitcoin futures: what’s the matter?
Trade figures – what indicators to choose? Part 2
Trade figures – what indicators to choose? Part 1
Instant deposits in EUR on EXMO
Cryptocurrency rate changes: reasons and factors

Thank you for staying with us!
Your respectfully, EXMO team