Launched by the CME Group in December 2017, Bitcoin futures have changed the landscape of the cryptocurrency market. Allowing investors to participate in the Bitcoin market without actually owning the coin, Bitcoin futures (BTC) traders speculate on its price via a regulated futures exchange.
Representative of the global crypto market as a whole, Bitcoin is considered the most dominant cryptocurrency instrument. While BTC futures initially received a mixed response from the futures community, volume has steadily increased since it was introduced.
Bitcoin futures have helped to build additional interest in cryptocoins and the success of BTC leads some analysts to forecast that altcoins such as Ethereum, Litecoin and Ripple might also become tradeable futures as well.
Why Trade Bitcoin Futures?
As with other futures contracts, Bitcoin futures allow participants to speculate on the price of Bitcoin without having to buy or sell the underlying cryptocurrency itself. With regulatory oversight by the Commodity Futures Trading Commission (CFTC), this gives futures traders the reassurance of trading a regulated instrument.
Please note: Although CME Bitcoin futures are subject to regulatory oversight, the underlying Bitcoin digital currency is unregulated and can therefore impact the Bitcoin futures market.
Additionally, BTC futures allow traders to speculate on the future value of Bitcoin without trading through a cryptocurrency exchange. No digital wallet is needed since BTC futures are financially-settled and do not involve the exchange of Bitcoin itself.
Bitcoin Futures Contract Specs:
- Exchange: Chicago Mercantile Exchange (CME)
- Class: Futures
- Trading Symbol: BTC
- Contract Size: 5 Bitcoin
- Pricing Unit: U.S. Dollars
- Tick Size: 5
- Tick Value: $25
- Point Value: 1 = $5
- Average Daily Volume: 6,950 (Year to Date July 2019)
- Intraday Margin: $40,000
- Contract Months: Monthly (January – December)
- Trading Hours: Sunday to Friday 6:00 pm – 5:00 pm ET
- Position Limit: 2 contracts
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