What are Bitcoin Futures? - CME Group (2024)

FAQs

What are CME Bitcoin futures? ›

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.

The price of a single bitcoin when the futures contract was purchased was $5,000 each, totaling $50,000 for both futures contracts. The margin requirement for Bitcoin futures trading at CME is 50% of the contract amount, meaning you must deposit $25,000 in your margin account.

The best crypto futures platforms, such as Binance, Bybit, and BitMEX, offer many benefits, such as high leverage, low fees, and strong security. To find the best platform for your trading plan, think about things like trading fees, leverage, and how easy it is to use.

Normal Daily Settlement Procedure

CME Group staff determines the daily settlements for Bitcoin (BTC) futures based on trading activity on CME Globex between 14:59:00 and 15:00:00 Central Time (CT), the settlement period.

Bitcoin futures are derivative contracts that obligate the buyer to purchase, and the seller to sell, Bitcoin at a predetermined future date and price. Trading Bitcoin futures does not involve the direct exchange of Bitcoin itself.

With a Bitcoin futures contract, you can take a long position if you expect the price of Bitcoin to rise. Conversely, you take a short position to reduce the impact of losses when the price of Bitcoin falls. When investing for the long-term, Bitcoin may experience occasional bear markets as sentiments change.

3. How are the futures settled? Daily settlement for the EUR- and USD-denominated contracts are based on their respective volume-weighted average price (VWAP) of CME Globex trades between 2:59:00 p.m. and 3:00:00 p.m. Central time (CT) rounded to the nearest tradable tick.

Bitcoin and bitcoin futures can be highly volatile. Leverage created by futures contracts can significantly amplify both gains and losses. Futures contracts are standardized, time-limited contracts that convey the right to buy or sell the underlying asset at some point in the future.

Front-month futures contracts typically trade closest to the spot price of Bitcoin, and they can trade either above or below the spot price, depending on whether the market believes Bitcoin prices are headed higher or lower in the near term.

Why trade Bitcoin futures? ›

Crypto futures can help protect against downside risks while executing a long term strategy. They can also be used to capitalize on temporary opportunities during short term periods of market volatility.

This reference rate is called the bitcoin reference rate (BRR) and serves as a once-a-day reference rate of the USD price of one bitcoin. Investors can trade on the exchange from Sunday through Friday, 5pm to 4pm CST. A single bitcoin futures contract has a value of five times the BRR index.

A CME gap refers to the difference between the closing price of Bitcoin on the Chicago Mercantile Exchange (CME) and its opening price when trading resumes. It occurs during weekends or after the market closes for a specific period.

Settlement at Expiration

In-the-money options are automatically exercised into expiring cash-settled futures, which settle to the CME CF Bitcoin Reference Rate (BRR) at 4:00 p.m. London time on the last Friday of the contract month.

The average price target for CME Group is $217.27. This is based on 11 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $250.00 ,the lowest forecast is $187.00. The average price target represents 8.21% Increase from the current price of $200.78.

Chicago Mercantile Exchange (CME) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures.