Trading Futures vs. Cryptocurrencies

Why Gamble Holding Crypto?

Futures trading can offer a more secure and flexible investment option compared to buying cryptocurrencies. Futures trading provides a highly regulated environment where safety of funds is paramount and transactions are guaranteed by established exchanges. Alternatively, cryptocurrency markets feature high volatility, unknown regulatory status and other potential safety and security concerns.

Here we will discuss the many key advantages of trading crypto futures contracts such as Bitcoin futures over holding the actual cryptocurrency including increased leverage, unrestricted shorting, tax advantages and more.

Benefits Of Trading Crypto Futures Over Buying Cryptocurrencies



Generally, a cryptocurrency is bought with zero leverage. As an example, if Bitcoin is selling for $25,000, it will cost you $25,000 to purchase. With futures, you can often put up less than 5% of the overall value to control a larger position in a cryptocurrency futures such as Micro Bitcoin futures. Leverage allows for potentially greater profits but, of course, with greater opportunity comes increased risk and the potential for large losses. Make sure you always have a risk management plan in place when trading leveraged futures.

Bar chart

Easily go short on crypto

When buying a cryptocurrency, your only real option is to hold or sell. This isn’t really trading. If you think the price of Bitcoin is going to decline, there is no real way to profit from that idea... except through crypto futures. For futures traders, entering a short position in Bitcoin or Ethereum is seamless, and every future can be shorted for any number of contracts and at any time.

Security badge

Regulated Markets And Trading Environment

While the cryptocurrency marketplace is fragmented across various unregulated exchanges with limited market transparency, futures trading is highly regulated by the Commodities Futures Trading Commission (CFTC). Futures exchanges, such as CME Group, serve as the clearing house for all trades, set the rules for margin and contract specifications and match and guarantee all transactions. Additionally, Futures Commission Merchants are required to maintain all customer funds in a segregated account to protect customer assets.

A starting place for new traders

Technical Analysis Made Easy

Build your futures trading foundation using technical analysis to identify trends, support and resistance, and key chart patterns.

Watch Now

Virtual 24-Hour Trading

Although both futures and cryptocurrencies offer nearly around the clock market access, futures are known for usually having higher levels of liquidity and trading volume, which makes entering and exiting trades easier. When buying crypto, a lack of liquidity can increase the bid and ask spread which can add a significant cost to the transaction. When added with other transaction fees, the cost of buying and selling cryptocurrencies can escalate quickly.

Arrows pointing in opposite directions


A key component of any successful trading strategy is the ability to diversify risk across a variety of assets to help reduce the impact of any single market movement on your account equity. When trading futures, there are dozens of uncorrelated products to trade including commodities, financial instruments including some cryptocurrencies and more. In contrast, while there are thousands of cryptocurrencies available, many are highly correlated. This means that they often move in tandem with one another limiting the ability to truly diversify.


Tax Advantages

The taxation and reporting of cryptocurrency transactions can be daunting and complex. Some common tax challenges include tracking gains and losses on every transaction, determining fair market value for tax reporting purposes and the lack of clear guidance from tax authorities. Alternatively, one of the most substantial benefits of trading futures are the clear and established tax rules. While crypto trading is taxed at 100% short-term gains, all futures profits are taxed using a 60/40 rule: 60% of gains are taxed as long-term gains and 40% are taxed as short-term gains. Be sure to consult your tax advisor for more information.

Play button

Watch Daily Live Futures Trading

Join our livestreams each weekday as we prepare, analyze and trade the futures markets in real-time using charting and analysis tools.

Watch Now

Intro To Technical Analysis

Learn to leverage technical analysis to target futures trading opportunities and identify trends using chart types, indicators and more.

Watch Now

Develop The Trader In You

Get started on your path to learn how to trade futures through our introductory video series outlining the first steps in your trading journey.

Watch Now

Make The Right Choice For Your Trading Goals

When it comes to your money, it's important to carefully consider your options and choose an approach that best aligns with your personal financial objectives and risk tolerance. While the world of cryptocurrencies may appear to offer exciting upside, these unleveraged opportunities can be somewhat muted if you have limited starting capital.

There is no funding minimum requirement to get started with NinjaTrader and unlimited risk-free simulated trading is included with all accounts.

Open Account

Best Brokerage for Trading Futures

NinjaTrader is recognized for our unique combination of a high-performance trading platform, discount pricing, and real-time support.

Download NinjaTrader's award-winning software for FREE and see why it's consistently voted an industry leader by the trading community. NinjaTrader is always free to use for advanced charting, backtesting and trade simulation.

Get Started