How do bitcoin futures work?

Bitcoin futures work the same way as any futures contract on a traditional financial asset. Investors can either go long on Bitcoin — expecting the price to increase — or short it, mitigating potential losses if they actually own some Bitcoin.

What is a bitcoin ETF?

Four years later, ProShares made history again by launching a Bitcoin ETF based on futures contracts, the first ever crypto exchange-traded fund to gain regulatory approval to trade on a major U.S. market. Bitcoin futures offer investors a unique way to speculate in the crypto market and hedge their crypto holdings.

Are bitcoin futures still available?

However, Bitcoin futures have been available since the end of 2017, and they are increasingly available on regulated exchanges. They also may potentially impact regulatory decisions on further financial instruments for Bitcoin, such as ETFs.

Why do bitcoin futures traders use leverage?

Because each Bitcoin futures contract represents 5 BTC, there is inherent leverage in the Bitcoin futures market. Bitcoin futures traders often use that leverage to speculate on short-term swings in the market in an attempt to generate large returns on relatively small upfront investments.