What is a Bitcoin Futures?

Bitcoin futures represent a significant facet of Bitcoin (BTC) trading, enabling speculation on the future price movements of this cryptocurrency. These futures come in diverse contract types with varying expiration dates. Investors engage in buying and selling Bitcoin futures contracts based on their forecasts regarding Bitcoin's future price trends. Notably, Bitcoin futures contracts allow for trading activities prior to their expiration dates. Upon expiry, settlement occurs, and the contract holder receives the corresponding value either in Bitcoin or cash, depending on the specific trading instrument and prevailing market conditions. While cash-settled Bitcoin futures compensate holders in cash, physically settled Bitcoin futures offer payouts in BTC.

Numerous cryptocurrency exchanges provide platforms for Bitcoin futures trading, catering to a wide range of investors. Moreover, Bitcoin futures are accessible in mainstream financial markets through multiple channels. For instance, the Chicago Mercantile Exchange (CME) facilitates cash-settled Bitcoin futures trading, alongside offering Bitcoin options associated with these futures.