What Is the Best Way to Trade Bitcoin Futures?

If you want to discover what the best way to trade Bitcoin futures is, you’ve come to the right place. In this guide, we’ll explain crypto futures and how and where to trade them.

We’ll also discuss the benefits of BTC futures trading, the main differences between trading on regulated and unregulated exchanges, and the profitability of BTC futures trading.

What Are Cryptocurrency Futures?

Crypto futures are contracts that traders use to bet on the future prices of cryptocurrencies. These contracts allow traders to make money from price changes of digital assets without actually owning them. Crypto futures reflect the price of a specific digital asset at a set date in the future. They also require traders to buy or sell the underlying asset at a predetermined price on a certain date.

Investors can take long and short positions. The former refers to predicting a price increase, while the latter relates to predicting a price decrease. There are two types of crypto futures — standard and perpetual. Standard futures have fixed dates, while perpetual futures don’t have an expiration date.

The most common types of crypto futures include Bitcoin futures, Ethereum futures, and Litecoin futures.

Where Is the Best Place to Trade Bitcoin Futures?

Investors can trade BTC futures on a crypto futures exchange. However, trading on regulated and unregulated exchanges differs considerably. Here’s how.

Trading on Regulated vs Unregulated Exchanges

On a regulated crypto contract trading platform, investors can start futures trading after the trading service provider approves their account. The service provider will also determine leverage and margin amounts, and government agencies will regulate the maximum leverage.

Traders will be able to hold or sell their futures contracts. Once the contract ends, they can extend it or let it expire to collect the cash due.

On the other hand, unregulated platforms offer greater leverage. This means that traders will be able to earn more profit but also lose more money. Unregulated platforms usually include many DEXs, P2P exchanges, and offshore exchanges.

How to Trade BTC on Futures

The next part of our crypto futures trading guide for beginners will explain the trading process. To trade BTC futures, you need to set up an account on a trustworthy crypto exchange that provides futures trading. Some of the best crypto exchanges available right now are OKX, MEXC, and Margex. For instance, OKX is great for advanced traders because it has a futures grid trading bot. MEXC has the lowest fees for futures trading, while Margex focuses on perpetual futures.

Secondly, you’ll have to make a deposit and select a contract that suits you best. Finally, you’ll have to enter the trade. You must specify the price quote, contract unit, and margin requirements. When it comes to positions, take a long one if you believe BTC’s price will go up and a short one if you believe its price will fall.

Visit OKX

What Is the Best Broker for Bitcoin Futures?

The main difference between the best crypto futures trading platform and the best crypto broker lies in their trading methods. Crypto brokers act as intermediaries between traders and exchanges. They also set prices that are higher than those of the deposited funds. Moreover, crypto brokers must be regulated by financial authorities.

Binance is currently one of the best brokers for BTC futures. It offers perpetual and quarterly contracts and trading bots. It also offers high liquidity and a leverage of up to 125x on BTC futures.

The futures options on Binance include:

USDT perpetual
USDC perpetual
USDT delivery
COIN-M perpetual
COIN-M delivery

Besides BTC, Binance offers futures contracts with over 500 trading pairs. The minimum trade for Binance futures amounts to $1.

Benefits of Bitcoin Futures Trading

Now that you know what the best way to trade Bitcoin futures is, here are the main benefits of BTC futures trading:

Profiting from Bitcoin futures price movements: Trading futures will help traders benefit from BTC’s price fluctuations without owning it. They also won’t have to own a Bitcoin wallet.
Margin trading: Investors will be able to borrow funds to increase their position and boost their profits by trading on margin.
Risk management: Traders will be able to use risk management strategies, such as stop-loss orders, to protect their investments.
BTC futures trading strategies: Traders can use different methods to maximize profits. These include day trading, swing trading, arbitrage, and hedging.
Liquidity: BTC futures markets usually offer high liquidity.
Leverage: BTC futures come with large leverage.
Diversification: Investors can diversify their portfolio and gain exposure to BTC without owning it.

Is Bitcoin Futures Trading Profitable?

Yes, BTC futures trading is profitable because traders can benefit from BTC’s price movements. How? By predicting how Bitcoin will perform in the future. You can buy a BTC futures contract if you think its price will rise or sell it if you expect it to drop.

For example, you decide to buy a BTC futures contract and open a long position when the price of BTC amounts to $50,000. If the price of BTC jumps to $90,000 by the expiry date, you’ll gain a $40,000 profit. On the other hand, the crypto market is very volatile. This means that you could also experience significant losses. For example, if the price of BTC drops to $30,000 by the expiry date, you’ll lose $20,000.

In short, trading with BTC futures is profitable but comes with certain risks.

Conclusion

What is the best way to trade bitcoin futures? The best way to trade BTC futures is to create an account on crypto exchanges that support futures trading. Keep in mind that trading on regulated exchanges comes with certain limits. For example, the service provider will determine leverage and margin amounts.

BTC futures come in two types — standard and perpetual. The former have fixed dates, while the latter have no expiration date. The main benefits of BTC futures trading include profiting from price fluctuations and gaining exposure to BTC without owning it.