Bitcoin Futures Features and Terminology

Bitcoin Futures Trading Features and Terminology

  • Interest for Bitcoin Future Trading continues to grow
  • Traders are looking to enter trades more frequent due to given volatility
  • With increasing demand and people coming into Crypto-world, there are some rules and terminologies that you must know

On behalf of BTCC, I would love to play my part in assisting you to learn and stay informed. I will also provide you with the details that you should know about the Bitcoin futures, in my opinion, to level-up your game!

What are Bitcoin futures: Most of the hype linked to the Bitcoin is about getting rich. Thanks to Bitcoin; many of the investors have already managed to live-off their dreams through the bull-runs that came in the past decade. Now, the Bitcoin is the trader’s most beloved financial asset!

Traded on the exchanges, to suit the trader’s requirements, the CME Group and relevant came up with the derivatives to allow trading Bitcoin. Today, many of the platforms are providing this future of trading the Bitcoin futures. To explain, like any other futures contract; the Bitcoin futures act similarly where they tend to remain in affiliation to the underlying asset – which is the Bitcoin itself in this case.

With the movement of the Bitcoin, the futures move as well – allowing the traders to take benefit whichever side the Bitcoin is to move by taking either of a long or a short position on the contract. It’s all about minting money for the traders after all!

Trading the Bitcoin futures: You can trade Bitcoin futures personally on exchanges that offer the service (BTCC provides Future contract options for Bitcoin and eight other pairs for trading).

Once you have decided to trade the Bitcoin futures, you need to have the necessary account on an exchange that offers the service (Warning: not all exchanges are reliable and secure! **). Making your deposit, you need to decide the contract you are looking to trade and pick on an entry price with a defined leverage-option, number of contracts and the stop-loss levels.

The long and short: Since we are looking at trading the Bitcoin futures in this article, it is essential to know these two terms – the long and the short. When you BUY Bitcoin futures for a trade, you are taking a long position on the underlying asset. On the other hand, when you think that Bitcoin is likely to drop down on its price and you sell for a trade, you are deemed to have taken a short position.

What sets the Bitcoin future price: The price of Bitcoin future is set by the underlying asset – which is the Bitcoin itself. To understand how the price of Bitcoin future moves, you need to understand the price movement of Bitcoin first.  

Like any other financial asset, it’s all about the demand-and-supply rule when it comes to setting the price for Bitcoin. To make it sound more comfortable, the Bitcoin price is set by the mutual agreement of the buyer and seller. With the strength of the market participant, be on the buying side or the selling, the price tends to move due to either of the selling-pressure or the rising demand. The buying/selling pressure could be news-driven, based on sentiments or even technical support resistances and the psychological barriers.

As the Bitcoin prices move, the traders tend to take positions into the future contracts aligned to the price of Bitcoin. If any material difference exists, traders looking for arbitrage tend to enter the market and close the gap. For example, if the Bitcoin price is higher and the Bitcoin future is trading lower, a trader would sell Bitcoin in ready and go long on the futures contract. Similarly, if the price of the Bitcoin future is significantly higher than the Bitcoin price, a trader who has an arbitrage requirement matching the difference for taking a short position in Bitcoin future and buy the Bitcoin coin.

How can you earn:

Trading the Bitcoin futures to make money works for many traders due to the volatile movement it offers. This is the chart below:
Figure 1 – The Bitcoin future volatility, January 2020 to date. Source:, available at:

As visible in through the chart above that shows the Bitcoin future contract’s price movement in correlation to the Bitcoin coin movement. As discussed earlier, the price of both the coin and future contract seem to be strongly correlated, which is visible in the above-shown graph.

I hope this helps! If there is anything that you would want us to deliver to you to add to your learning or exposure, feel free to leave your requests in the comments section!

Also, don’t forget! BTCC as your trading partner offers you the features that assist you in achieving your maximum potential! From account sign-up process that takes 30 seconds ONLY, BTCC is all yours to trade on.

BTCC – helping our clients achieve most out of the Crypto-world!

**Not all exchanges that offer service of trading Bitcoin futures are secure. You have to be very careful in making your choice. BTCC takes pride in being among the oldest of exchange that has never compromised on the safety firewalls. It is currently the only oldest exchange which has not been successfully attacked! You should know – BTCC is your best Bitcoin Future trading partner!

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