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What are bitcoin futures?

Futures are a type of derivative contract that obligate two parties to exchange an asset—or a cash equivalent—at a predetermined price on a future date. When investors buy and sell Bitcoin futures contracts, they are speculating about BTC’s future price.

What is CME's bitcoin futures contract?

CME’s Bitcoin futures contract, ticker symbol BTC, is a USD cash-settled contract based on the CME CF Bitcoin Reference Rate (BRR), which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin.

What is a futures contract?

It’s called a futures contract. A futures contract is an agreement between two traders that obligates a trader to buy or sell an asset at a specific time, quantity and price. For example, you might enter an agreement in mid-March to buy one Bitcoin for $4,000 for August 30.

What happens when Bitcoin futures expires?

If there are only two days to expiry, the futures price calculation formula simply tells us that the price of the Bitcoin futures contract will remain very close to its spot price because of the time remaining. But its spot price may shoot up or down significantly within hours because of high volatility.

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