Best Overall Bitcoin Futures Exchange

Cryptos
  • Bitcoin
  • Ethereum
  • Litecoin
  • Bitcoin Cash
  • Cardano
  • EOS
  • Ripple
  • Tron
Fees
  • Maker: -.025%; Taker: .075%
Currencies
  • Crypto Only
Deposit
  • Crypto Only

Bitmex is the top bitcoin and cryptocurrency futures exchange in the market, rivaled only by Asian-focused OKEX.  Bitmex offers massive trading volumes (often over $2B per 24 hour period), very low fees, numerous cryptocurrency pairs, and instant, anonymous registration and (almost) instant deposit.  All trading is collateralized and settled in bitcoin, and all cryptos are priced against bitcoin, not against fiat.

Bitmex offers the markets highest leverages, with the bitcoin spot and futures allowing up to 100X for you gamblers out there.  Of course, the leverage is adjustable from 1-100, so set it where comfortable. The underlying index is currently based on a 50/50 split between coinbase and bitstamp, and a funding rate is paid from long positions to shorts, or vice versa, every three hours to jam the derivative price back in line with the index.  

Bitmex provides excellent, Western-oriented support via email or troll box (which can be entertaining and comparatively well-behaved and educated) and contribute research to the market of a very high quality.  We wholeheartedly recommend Bitmex, not simply because it is the best crypto futures exchange in the market, but because they are an example of a positive force in the crypto-community. Bitmex is targeted towards non-US customers, and they discourage the use of VPN.  

Open your account now and save 10% on your  trading fees.  Want to know more?  Check out our Bitmex Review.    

Runner Up

Cryptos
  • Bitcoin
  • Ethereum
  • Litecoin
  • Bitcoin Cash
  • Ethereum Classic
Fees
  • Taker: 0.2%; Maker: 0.0%
Target Market
  • Global
Currencies
  • USD
Deposit
  • Bank Wire

Coming in at number two is OKEX which, while a good deal behind Bitmex in our book, is the second and final bitcoin futures exchange in the top echelon.  After OKEX, there is a big drop to number three.

So what’s good?  Perhaps the best argument for choosing OKEX over Bitmex is that each token’s future market is collateralized and settled in that token rather than bitcoin.  For those looking to hedge non-bitcoin cryptoasset holdings, this might be a more convenient mechanism. And you will not find any other exchange offering higher volumes in these alternative assets.  And bitcoin futures volume, though surpassed now by bitmex, is head and shoulders above anyone else in the market.

On the flip side, OKEX no longer has superior liquidity to Bitmex, so there is little reason to suffer through the account verification process.  OKEX is a global exchange, but very much an East Asian product. If you have problems with verification specifically, or your account in general, the customer support often gets a bit lost in translation to put it mildly.   

The Best of the Rest

Deribit is the Top Options Platform, also has Decent Futures Exchange

Cryptos
  • Bitcoin
Fees
  • Maker: -.02% Taker: .05%. Options .04%.
Target Market
  • Global
Currencies
  • Crypto Only
Deposit
  • Crypto Only

The big point in Deribit’s favor is that they allow US customers to trade Bitcoin Futures so you needn’t sweat using a VPN.  Deribit sports really nice product, and is the top exchange to offer an options market.  They are beginning to take on some real volume, and should the market mature deribit will find itself in a very interesting position.

And this is the problem with Deribit – it simply does not yet have the volume of either BitMex or OKEX yet.  However, there is some action to be had there, the fees are low, and the spreads are not half bad. If you are a US trader wary of using a VPN, opr you want to try your hand at bitcoin options Deribit is worth checking out.  

Cryptofacilities

Cryptos
  • Bitcoin
  • Ethereum
  • Litecoin
  • Ripple
Fees
  • Maker: 0; Taker: as low as .0008
Target Market
  • Global
Currencies
  • Crypto Only
Deposit
  • Crypto Only

Cryptofacilities is licensed and regulated by the UKs FCA, which might be quite appealing to some traders. Those traders will have a hard time actually trading however, thanks to Cryptofacilities miniscule volumes.  It seems that the FCA angle is being used to attract institutional money – if that strategy does not work, Cryptofacilities is doomed as they have not built the necessary volume.

A recent redesign presented a much nicer face to the product, and the trading platform and logic are all more than adequate. However, for some reason traders have simply not flocked to cryptofacilities, and unlike Deribit they do not accept US customers which limits the sort of regulatory flaunting that might work to their advantage.

One plus for the platform is their Ripple markets.  Trades of Ripple against USD or BTC may be collateralized in XRP itself, which might be very attractive to the traders who hopped aboard the Ripple train as it shot to the moon (missed, and came back into orbit). Whilst not nearly at the liquidity levels of the Bitmex XRP market, only bitcoin may be used there for trading.  So, a distinction that might be valuable to some.

The Best Bitcoin Futures Exchanges Operating in the USA

The US exchanges listed below offer bitcoin futures trading collateralized in USD.  These exchanges all have well-deserved reputations for excellence in the USA – however, their bitcoin futures contracts are, in our opinion, inferior for a number of reasons to the bitcoin collateralized products outlined above.  Specifically, the leverages, trading hours, and margin requirements are all prohibitively limited for all but institutional investors or high net worth individuals.  For those of us who are not high net worth or would like to trade with greater than ~50% margin, we do recommend going with one of the exchanges above.

Tradestation

Cryptos
  • Bitcoin
Fees
  • $1.50
Target Market
  • United States
Currencies
  • USD
Deposit
  • Bank Wire, ACH, Debit Card

Of the big American online brokerages offering bitcoin futures contracts, Tradestation is is best in show.  So why does it lag behind literally every bitcoin-only futures exchange? Simply due to the eyebrow-raisingly high margin requirements.  You need to plop down 66% of your position’s nominal value, which sort of defeats the purpose of a futures contract in our somewhat ignorant opinion.  

If you are are relatively high-net-worth individual that lives in the states and wants exposure to bitcoin without bothering to buy the underlying instrument, this could be for you.  If you can get over the margin requirements, TradeStation offers access to both the CME and CBOE markets on their flagship platform, and with the lowest fees in the market to boot.

Ameritrade

Cryptos
  • Bitcoin
Fees
  • $2.50
Target Market
  • United States
Currencies
  • USD
Deposit
  • Bank Wire, ACH

Ameritrade might top TradeStation except for the fact they offer only CBOE contracts.  We personally would trade CBOE as the contract is worth only one bitcoin to CME’s five, meaning your position can be a good deal smaller.  (Though we greatly prefer CME’s blended index pricing to CBOEs, which uses only Gemini for some unknown reason). This benefit is somewhat offset by the minimum account size requirement of $25,000 to trade bitcoin, which is higher than any of the competition.  However, if you already have a trading account, there is a good chance you’ve got that minimum already covered.

And if you do have that minimum covered and are fine trading CBOE contracts, you can do so from Ameritrade’s awesome thinkorswim platform, widely thought to be one of the top products in the market.  (Tradestation is also awesome). The fee difference between Ameritrade and Tradestation is negligible as well – an extra 0.75c a contract on Ameritrade – and the margin requirement is the same

E-trade

Cryptos
  • Bitcoin
Fees
  • $2.50
Target Market
  • United States
Currencies
  • USD
Deposit
  • Bank Wire, ACH, Check

e-Trade targets the mass market and has a huge volume of traders.  How many will put up an 80% margin on nominal bitcoin futures contracts is yet to be seen, but those that do may choose from either CME or CBOE contracts.  The fee falls a bit on the heavy side compared to our previous two reviews – $2.50 as opposed to $2.25 and $1.50 – but unless we are missing something, this seems entirely negligible on contracts with 80% margin valued between 1 to 5 bitcoin.

If you were to overlook the 80% margin, you do get access to both CME and CBOE markets, and e-trade is a great overall product.  For those already with an account have at it. For those looking for a new bitcoin futures home – and a home that allows USD collateralized trades in a regulated format – we have a hard time thinking of good reasons to pick etrade over Tradestation to be honest.

Interactive Brokers

Cryptos
  • Bitcoin
Fees
  • $5 on CBOE, $10 on CME
Target Market
  • Global
Currencies
  • USD, EUR, GBP, AUD, CAD
Deposit
  • Bank Wire, ACH, BPay, EFT, Check

Interactive Brokers seems to be integrating bitcoin futures begrudgingly.  It is one of those – yes fine, we do offer it, but really, do you ACTUALLY want to trade this thing?  

On the positive side, longs can open positions with a 50% margin, which is better by a good deal than the rest of the US brokerages.  However, shorts need to provide massive excess margin – meaning you need to control more than the nominal value to open a short. That makes no sense from a trader’s perspective.  Additionally, the fees are well higher than the rest of the market at $10 for CME contract, $5 for a CBOE contract, though this includes all additional fees. (they do not make up for the difference).  

So I guess if you want to long, Interactive Brokers is a good option – but if you are looking to short, or to hedge your holdings, look elsewhere.

More About Bitcoin Futures

Bitcoin Futures are traded between market participants

Bitcoin futures are traded between market participants, which removes any theoretical conflict of interest between the trader and the exchange. Futures will ultimately expire and settle at a price determined by an index that is usually transparent and fairly sourced; prices are not set by the brokerage, which removes any potential for price manipulation.

Bitcoin Futures are Cheap to Trade

Commissions are extremely low; BitMex, who in our view sets the bar for bitcoin futures trading, waives fees entirely for makers or even offers a fee rebate. Buy a 10 bitcoin futures contract as a taker, for instance, and you would pay .0075 bitcoin, while a maker would receive one-third of that as a rebate.

As futures contracts are literally a down payment on deferred delivery of an asset, traders need not pay any sort of funding premium or interest rate. This is a distinct difference from CFDs or standard margin accounts.

Bitcoin Hedging

Futures contracts can be used to mitigate risk of overexposure. There is a significant class of traders and early adopters who have amassed a disproportionate percentage of their overall wealth in bitcoin. Short term hedging strategies against volatility and downtrends allows for a more active management of that wealth. Bitcoin futures (and options of course, which we will address in a subsequent article) allows for this hedging without needing to actually liquidate bitcoin and buy fiat.

Perhaps an upcoming fundamental event is spooking the market, or you recognize technical patterns that precede a downturn; shorting a futures contract will soften the impact to the fiat value of your holdings. High leverages allow for disproportionate payouts should the market indeed drop, with the added benefit that you are able to keep the majority of your coin safely in it’s trezor.

Bitcoin Futures Arbitrage

In a normal market, futures contracts are priced at a premium over the spot price, with the difference decreasing over time as the settlement date draws nearer. To toss in a bunch of futures jargon, this diminishing difference between the spot price and the futures price is called the basis, this normal market condition is termed contango, and when the spot and contract prices meet, which they always must do at settlement, this is called convergence.

Let’s assume that you buy 10 bitcoin at $4,000. At the same time, you open a position shorting the equivalent of 10 bitcoin in futures contract, which trade at a 5% premium, or $4200. You have locked in that 5% upside, because you bought bitcoin at $4,000 and have an agreement to sell it in the future at $4,200, while at the same time hedging against downswings that could affect your holding. Of course, upside is limited to that 5%, but if you sense a rally you can liquidate your future position.