In late 2017, the Chicago Board Options Exchange (CBOE), currently known as the Cboe Options Exchange, introduced regulated bitcoin futures trading, which was quickly followed by contracts on the Chicago Mercantile Exchange (CME). While the Cboe product is no longer available, CME futures have become a significant part of the crypto trading market. The rolling 24-hour notional value of all futures contracts across major exchanges in the United States and internationally was $26.9 billion on February 16. The notional value of bitcoin is calculated by multiplying the price of bitcoin by the number of futures contracts purchased by investors.
Is it possible to trade Bitcoin futures in the United States?
Bitcoin futures trading began in the United States in late 2017, giving traders and investors with a variety of options for speculating on cryptocurrencies without needing to own and hold Bitcoins. Trading began in December 2017, when two major US exchanges announced that new futures products will be available:
- The Chicago Board Options Exchange (CBOE) announced the launch of XBT on December 10, 2017. (CBOE Bitcoin USD Futures)
In 2018 and beyond, more major trading exchanges are expected to start selling Bitcoin futures products.
The following are some of the benefits of trading Bitcoin futures over merely buying and holding the cryptocurrency:
- With the option to trade Bitcoin futures long or short without needing to keep the underlying Bitcoins, you can have immediate exposure to Bitcoin price swings.
- Execute short- and long-term trading strategies with ease, or hedge any current Bitcoin holdings.
- To control Bitcoin futures holdings, employ margin and leverage, which allows you to make the most of your account equity.
- On futures positions, use stop losses, profit limit orders, and other trade management strategies that aren’t achievable with Bitcoins alone.
Why do people trade Bitcoin futures?
- We look at the traders who are involved in the Chicago Mercantile Exchange’s Bitcoin futures (BTC) contracts (CME)
- Those who hold nearly entirely BTC (concentrated traders) and those who hold BTC to diversify a broader futures portfolio (distributed traders) are the two main categories of trading (diversified traders).
- Diversified traders use common holdings to connect BTC markets to other futures markets.
- The micro contract’s Trader Composition differs from the full-size contract’s.
Webull
Webull may be less well-known than its rival commission-free trading app Robinhood, but it offers a robust portfolio of services, including bitcoin trading. Webull charges a spread markup of 100 basis points (1 percent of purchase price) on both sides of a trade, but there are no commissions on crypto trades (or equities and ETFs). Bitcoin, Ethereum, and Cardano are among the cryptocurrencies that can be traded. Webull is a broker worth considering because of its charting features and great mobile app.
TradeStation
Traders at this broker have a few options, as it has launched direct currency trading via TradeStation Crypto, with commission-based pricing. Pricing is determined by your broker’s account balance and whether or not your order is directly marketable. Normally, cost ranges from 0.05 percent to 0.3 percent of your order. Traders can also purchase and sell Bitcoin futures and benefit from significant volume trading discounts.
Binance.US
Binance is a specialized trading platform that lets you buy and sell digital currencies such as Bitcoin and Ethereum, as well as dozens of other, much smaller currency. You’ll get access to about 60 cryptocurrencies in total. Binance has a low commission structure that grows cheaper as you trade more. Trading fees begin at 0.1 percent of your trade value (i.e., $10 for every $10,000 transacted) and gradually decrease based on your trading volume over the previous 30 days.
Coinbase
Coinbase is a cryptocurrency trading platform that lets you trade digital currencies like Bitcoin, Ethereum, Solana, and Tether directly. You’ll have access to over 100 coins in total. For added security, you’ll be able to store your coins in a vault with time-delayed withdrawals. The commission structure of the exchange is quite high. It charges a 0.5 percent spread markup and a transaction fee that varies based on the size of the transaction and the funding source, albeit its Pro platform is less expensive.
eToro
eToro does not charge commissions for cryptocurrency trading, but it does charge a spread dependent on the cryptocurrency being traded, as do many other brokers. Bitcoin has a 75 basis point markup, but more esoteric cryptocurrencies can have a markup of up to 500 basis points, or 5%. CopyTrader is a key tool of eToro, and it allows you to track and identify other top traders on the platform, as well as imitate their trades. Before committing to this technique, be sure you’ve done your homework.
Kraken
Kraken is a cryptocurrency exchange that lets you trade in dozens of various digital currencies, including Bitcoin, Ethereum, and Cardano and Solana, as well as newer ones like Cardano and Solana. You’ll be charged a 1.5 percent fee, or 0.9 percent for stablecoins, with additional fees if you use a card and fund with a bank. A premium tier called Kraken Pro is available to more active traders, with fees ranging from 0.16 percent to 0.26 percent. Residents of New York and Washington state are currently unable to access Kraken.
TD Ameritrade
TD Ameritrade is one of the best full-service brokers on the market, and it not only offers traditional products like equities and bonds, but it’s also added Bitcoin futures to its portfolio. TD Ameritrade, on the other hand, does not allow direct trading in the digital currency. To get started with Bitcoin futures, you’ll need to meet the account minimum. (TD Ameritrade was purchased by Charles Schwab, and the two companies will eventually be integrated.)
Is it possible to trade Bitcoin on TD Ameritrade?
Do you want to learn how to invest in cryptocurrency? While TD Ameritrade presently does not sell cryptocurrencies, we do provide access to CME Group (CME) bitcoin futures and CME micro bitcoin futures, which allow qualifying clients to participate in the bitcoin market without actually owning any bitcoin. Learn the basics to see if bitcoin futures are a good fit for your overall trading strategy.
Is it possible to trade futures on Binance US?
Binance. Both US and Kraken are U.S.-based exchanges with low trading costs when compared to competitors like Coinbase. Both platforms have established KYC standards to assist prevent fraud and protect users, as well as industry-standard security features such as multi-factor authentication and wallet whitelisting. There are, however, some significant differences between the two platforms:
- Over 100 cryptocurrencies are available to buy, sell, and trade on Kraken, compared to just over 60 on Binance.US.
- Trading fees on Kraken are somewhat higher than on Binance.
- Fees for trading in the United States. Users of Kraken and Binance pay between 0% and 0.26 percent every trade. Users in the United States pay between 0% and 0.1 percent every trade.
- Binance.
- Margin and futures trading are not available in the United States, however Kraken does for some users.
- Kraken is available in 48 states in the United States, as well as on Binance.
- The United States is available in 45 states.
- Kraken offers a wider range of customer service choices than Binance.US. Users can call for help with their accounts, and live chat support is available 24 hours a day, 7 days a week.
Is it possible to trade futures with cryptocurrency?
Futures allow investors to protect themselves against turbulent markets by ensuring that they will be able to buy or sell a specific cryptocurrency at a specific price in the future. Of course, if the price changes in the opposite direction, a trader may find up paying more for bitcoin than the market price or selling it for a loss.
Can you trade on FTX in the United States?
FTX.US provides advanced trading options as well as NFT access and inexpensive fees. If you’re seeking for more obscure cryptocurrencies, though, you might want to look into other exchanges that provide a larger selection of crypto assets.
FTX.US is an American affiliate of FTX, a Bahamas-based company launched in 2019. The company is situated in San Francisco and was launched in 2020. Because the primary version of FTX is not available to US traders, residents of the United States must use FTX.US. Residents of the state of New York are not eligible to use FTX.Us.
The leadership team at FTX.US is made up of previous finance and IT industry personnel, and the company prides itself on being built by and for crypto aficionados. FTX.US offers a nonfungible token market where creators can mint NFTs for sale and buyers can make purchases from creators, in addition to crypto and fiat trading pairings.
Is it possible to buy Bitcoin futures?
Bitcoin futures, like stock or commodity futures, allow investors to speculate on bitcoin’s future price. Investors can trade monthly bitcoin futures on a variety of exchanges. Some are regulated, while others are unregulated.
What is the price of a Bitcoin futures contract?
The value of a single BTC contract is five times that of the BRR Index, and it is quoted in US dollars per bitcoin. The tick increments are expressed in $5 increments per bitcoin, therefore a one-tick move in the BTC future is worth $25.