Business & Investment

Why trade Bitcoin futures and spot markets?

Bitcoin Futures (BTC) allows traders to infer the price of Bitcoin without having to buy or sell the underlying cryptocurrency itself, called the “spot” currency. The accessible futures market offers some distinct advantages over actually owning digital coins.

Watch this 3-minute video to see why traders are choosing Bitcoin futures.

Key Benefits of CME Bitcoin Futures

Launched by CME Group in 2017. Bitcoin futures It changed the outlook and perception of cryptocurrencies. By providing a market for participating in Bitcoin price actions without owning the underlying currency, BTC futures and futures options can offer traders a clear advantage.

  • Easy access: Bitcoin Futures (BTC) trading offers the same accessibility as other CME derivative products. Existing futures traders can seamlessly start trading Bitcoin futures, and new traders can open a futures trading account with NinjaTraderBrokerage with a minimal investment, including just $ 400.
  • Trade on both sides of the market: Active traders who frequently do day trading and swing trading have a particular advantage because BTC can trade long or short without restrictions. Bitcoin spots can only be traded on the long side. That is, investors can only bet on rising currencies.
  • Regulated market: Regulatory oversight by the Commodity Futures Trading Commission (CFTC) gives Bitcoin Derivatives Traders peace of mind when trading on regulated exchanges. *

The chart above shows the weekly price action of BTC futures over the last 18 months. From the relatively low value of 4985 in March 2020, BTC has since recovered and has been hovering around the resistance area since June 2019. 50 days and 200 days Simple moving average Applied to charts for further analysis.

Spot Bitcoin Challenges

In contrast, traders looking to start trading real Bitcoin, or “bitcoin spots,” face some unique challenges.

  • Need more homework: To start trading Bitcoin Spot, investors must first set up a digital wallet on an online platform such as Coinbase or Cracken. This process can be difficult for those who are not tech-savvy or unfamiliar with cryptographic situations.
  • Account Security Concerns: Web-based cryptocurrency exchanges are more vulnerable to technical errors and security concerns than established and regulated financial hubs such as the Chicago Mercantile Exchange.
  • Tax challenges: The nature of cryptocurrencies and how they are treated for tax purposes can add complexity when dealing with taxes on cryptocurrency gains and losses.

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* CME Bitcoin futures and options are subject to regulatory oversight, but the underlying Bitcoin digital currency is unregulated and may impact the Bitcoin futures market.

This article is for educational and informative purposes only and should not be considered a solicitation or recommendation for a product, service, or trading strategy. This includes content from independent individuals or companies that have nothing to do with the NinjaTrader Group (NTG) or its affiliates. The content and opinions contained in this article do not necessarily reflect the official policies or positions of NinjaTrader or its affiliates.

NinjaTrader Brokerage It is a member of the NFA and is subject to NFA regulatory oversight and investigation. However, it should be noted that NFA does not have regulatory oversight of cryptocurrency commodities and transactions, cryptocurrency exchanges, customers, underlying markets, or spotting them.

to see NFA & CFTC Advisory as it contains detailed information about the risks associated with trading cryptocurrencies.



Why trade Bitcoin futures and spot markets?

https://ninjatrader.com/blog/why-trade-bitcoin-futures-vs-the-spot-market/ Why trade Bitcoin futures and spot markets?

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