Bitcoin Futures Trading Strategies And Facts (Explained)


During the financial crisis of 2008 to 2009, a new technology emerged in the environment called cryptocurrency. This decentralised digital currency is not controlled by a third party such as and bank or an organisation. It is a peer-to-peer Bitcoin network which communicates user to user through a blockchain process. Blockchain is a ledger of all digital transactions which were held between users. Bitcoin gradually becomes the preference of most people as it is the best way to store the value of each exchange despite any legal tender. The first bitcoin introduced in the market was by the Cover future exchange in December 2017. Read on to know more in detail about bitcoin’s popularity and to have an overall better understanding!

At that time, it created a milestone with its transparency, liquidity and efficiency in price discovery to the bitcoin ecosystem. After that on 18th December 2017, the CME Group launched its bitcoin future by declaring exposure of the bitcoin without holding any other cryptocurrency. Thereafter the firm of regulated features in international exchange in September 2019 created a warehouse where they settled the future of bitcoin.

Why Trade the Bitcoin Futures

The future aspects of bitcoin

Hedging: the strategy used to limit the risk of financial loss of the digital asset is known as Hedging. Therefore, just like other assets, bitcoin trading in future may also be risky. For example, bitcoin could be sold by the miners in future against the volatile nature of bitcoin prices as they may go down in future. Therefore, miners should fix the value of the asset at the current price to avoid the loss in future in case of a low value of bitcoin.

Speculation: Most traders in the digital market trade based on speculation. Therefore, future trading of bitcoin might be dependent upon the guess basis. They could guess the price of bitcoin in future and trade accordingly.

Arbitrage trading: It is the process to buy or sell bitcoin currency by traders on different platforms to get benefit from any imbalance in bitcoin price value.

How the Bitcoin Futures Trade?

As compared to recent times, the future of bitcoin is regulated and offered by the following exchanges: Chicago Mercantile Exchange's electronic platform or the international exchange or the code future exchange. All above are declared as regulated future exchanges. But bitcoin trading is also possible in unregulated futures exchanges such as CoinfloorEX, and BitMEX Hong Kong-based. Some unregulated exchanges are publicly accepted by the digital market despite of some regulated exchanges and the famous un-regulated bitcoin exchanges are CoinfloorEX, and the Hong Kong-based BitMEX, which offer bitcoin futures. The contracts which are possible to deliver physically are known as CoinfloorEX.

Bitcoin Trading Strategies

However, there are many features available in the market which were used to create trading strategies for the future of bitcoin but there may be consequences until the liquidity of the asset is uncertain. Both fundamental and technical features can affect future bitcoin prices but let's focus on the fundamental factors only.

● Regulatory changes by world governments: Bitcoin prices may vary due to regulations implemented by the government. They could be in favour or not.

● Inconsistencies in the bitcoin network: The miscommunication between the blockchain network and the government's direction could be a reason for the inconsistency. For example, the hard fork was going to emerge from bitcoin cash.

● Mass media: as the media will receive positive news about the bitcoin prices, it will be publically leaked soon and they will investigate further to know the authenticity of the news.


Only the bitcoin future can give the miners a way to take minimum risk in their financial assets and  price volatility. It can allow the traders to guess or speculate the future prices of the bitcoin currency which was offered by CFE, CME and ICE.

Post a Comment

Previous Post Next Post

Contact Form