5 Best Bitcoin Futures Exchanges in 2020

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Bitcoin futures are the most popular derivatives product to get exposure to Bitcoin’s wild volatility.

The reasons for this are simple: Bitcoin futures exchanges are extremely liquid, offer low fees, and enable the use of high leverage.

In this guide we review the best Bitcoin futures exchanges by comparing their fees, listed coins, leverage, security, and more. 

What Are Bitcoin Futures?

Bitcoin futures are a type of derivatives contract designed to offer traders increased trading flexibility and precision. As Bitcoin derivatives, these contracts track the underlying value of Bitcoin and describe the terms of an agreement between two parties—a buyer and a seller. When the contract expires, the seller will be obligated to sell an agreed quantity of Bitcoin to the buyer at an agreed price.

Because of this, Bitcoin futures can be used to speculate on both the magnitude and direction of Bitcoin price movements—allowing traders to easily go long or short on the market.

Since the launch of the first Bitcoin futures contracts in late 2017 by the Chicago Board Options Exchange (Cboe), the Bitcoin futures market has rapidly grown in trading volume, and according to a recent Bloomberg report, now exceeds that of the Bitcoin spot market by a significant margin.

Although Bitcoin futures enable a huge variety of different trading and investment strategies, they are typically used to speculate on the price of Bitcoin by going either long (bullish) or short (bearish). When combined with the ability to trade on leverage, futures contracts are an excellent way to extract profits from volatile markets like Bitcoin.

Beyond this, Bitcoin futures are an excellent tool for risk management, since they can be used by miners, cryptocurrency businesses and anybody else that might be holding Bitcoin as a way to reduce or eliminate price risk in the future.

As such, anybody with a sizeable long position might want to open a short hedge using Bitcoin futures contracts, since these will profit while their spot position declines, protecting them against adverse changes in the market price of Bitcoin.

Best Bitcoin Futures Exchanges Compared

 Futures ExchangeKey FeatureStart Trading
bybit logoBybitBest overall
bitmex logoBitMEXBest for deep liquidity
deribit logoDeribitBest for beginners

Best Bitcoin and Crypto Futures Exchanges

In the last few years, the number of cryptocurrency futures exchanges has increased drastically, giving users more choice than ever before when choosing the best futures exchange for their needs. Here, we summarize five of the most popular.

Bybit

bybit logoByBit (full review) is a platform that offers perpetual futures for Bitcoin, Ethereum, EOS and XRP. Beyond this, the platform places a strong emphasis on ease of use, with a simple user interface and fee schedule making the exchange attractive to beginner traders.

PROS

  • Regular promotions
  • Built-in spot exchange functionality
  • Huge trade volume for its Bitcoin perpetual
CONS

  • Limited number of futures contracts
  • Relatively new to the scene
  • US citizens not accepted

Despite launching in just 2018, the platform’s Bitcoin futures are already hugely liquid, and typically between $500 million and $1 billion 24-hour trade volume. By contrast, ByBit’s other futures contracts tend to achieve around $30-$50 million in 24-hour volume.

In terms of contract variety, ByBit keeps things decidedly simple and offers just four different perpetual futures products—one each for Bitcoin (BTC), Ethereum (ETH), XRP and EOS. Most of these futures contracts can be traded with up to 50x leverage, whereas up to 100% leverage is available for ByBit’s BTC/USD perpetual.

bybit trading interface

Customers will find a relatively simple user interface with robust charting tools, supplemented by a large variety of order parameters—giving users a great deal of control over their trades. Those needing support will find a comprehensive help center, which covers most basic concerns and provides in-depth educational material, while direct customer support is available via live chat and email.

For security, ByBit stores almost all user funds in cold storage, and offers several customer-side security features, including multiple two-factor authentication options, in addition to a detailed log of recent account actions (e.g. withdrawals, logins and more.)

ByBit also keeps its trading fees plain and simple, charging a 0.075% taker fee, while providing a maker rebate of 0.025% for all perpetual contracts. Beyond this, customers may need to pay a variable funding rate, which is clearly displayed in the contract details panel of the trading interface.

BitMEX

bitmex logoBitMEX (full review) is a futures exchange offering perpetual futures on Bitcoin and ETH, and regular futures on a variety of altcoins. Users can trade with up to 100x leverage and the exchange stands out for not requiring KYC. 

PROS

  • Excellent liquidity and up to 100x leverage
  • A wide variety of different order types
  • Robust security
CONS

  • Withdrawals can be slow
  • U.S. citizens cannot use the platform
  • Complicated UI

As it stands, the platform is the most popular Bitcoin futures exchange, and its XBTUSD perpetual futures contract typically sees more volume than similar products anywhere else.

In addition to Bitcoin, BitMEX offers a wide variety of regular futures contracts for EOS, LTC, BCH, XRP, TRX, and ADA, as well as perpetual swaps for just BTC and ETH. In terms of leverage, its BTC perpetual swap can be traded with up to 100x leverage, though most other contracts are between 20-50x max leverage.

bitmex futures exchange

When it comes to fees, BitMEX charges a 0.075% taker fee and offers a 0.025% maker rebate for both its Bitcoin and Ethereum perpetual contracts. Traditional futures, on the other hand, have a 0.25% taker fee and 0.05% maker rebate. A variable funding rate is exchanged between the shorts and longs on BitMEX.

The BitMEX user interface can seem daunting at first, particularly for newer traders, but this complexity does bring with it a wide variety of different order types and useful information needed to assess the market. This, complicated UI is somewhat offset by the wide variety of educational content and guides offered by the platform.

BitMEX takes the security of its users and their funds seriously, which is why the exchange hasn’t been compromised since its launch. The exchange only processes withdrawals once per day which allows the team to better monitor suspicious activity, while cold storage and a variety of customer-side security options like 2FA and IP whitelisting make it unlikely traders will lose money as a result of a breach.

Deribit

deribit logoDeribit (full review) is a derivatives trading platform that offers a huge variety of options contracts, in addition to futures for both Bitcoin and Ethereum. The platform is one of the few exchanges to offer leverage for options products, but does require KYC for higher volume users.

PROS

  • Large range of BTC/ETH options
  • Strong security practices
  • Leverage available for both futures and options
CONS

  • U.S. citizens are restricted
  • Limited deposit options (just BTC and ETH)
  • Newly introduced KYC policy

The platform was launched in 2016 and is managed by an experienced team consisting of John Jansen, Marius Jansen, and Sebastian Smyczýnski.

Like most of the platforms already listed, Deribit features a variety of cryptocurrency futures products, including a perpetual futures contract for both Bitcoin and Ethereum. These are tradeable with between 50-100x leverage.

deribit exchange interface

However, what sets it apart from the competition is its focus on crypto options, since the platform offers a huge number of options for both BTC and ETH, with a variety of different expiry dates and strike prices, available to trade with 10x leverage.

The platform interface is relatively simple to navigate, with robust charting features provided by TradingView, in addition to a good range of order options—catering to traders of all experience levels. However, though the platform is relatively simple to use, its fee schedule isn’t so simple:

  • BTC Perpetual futures: 0.075% taker fee, 0.025% maker rebate
  • BTC traditional futures: 0.05% taker fee, 0.02% maker rebate
  • ETH Perpetual futures: 0.05% taker fee, 0% maker fee
  • ETH Traditional futures: 0.05% taker fee, 0% maker fee
  • BTC options: 0.04% of the underlying or 0.0004 BTC/option contract
  • ETH options: 0.04% of the underlying or 0.0004 ETH/option contract

Beyond this, traders may need to pay a variable funding rate, which is shown in the trading interface after selecting a contract.

Deribit clearly places a strong emphasis on security, and has never been hacked in its more than three years of operation. 99% of user funds are kept in cold storage, while customers can choose from a variety of additional security options, including two-factor authentication (2FA) and IP pinning.

OKEx

okex logoOKEx is a Malta-based cryptocurrency exchange and futures trading platform that supports a huge variety of coins. On OKEx, users will find a range of futures, perpetual swaps and options, some of which can be traded with up to 100x leverage.

PROS

  • Excellent reputation
  • Offers both futures and perpetual swaps
  • Large variety of supported coins
CONS

  • Major focus on Chinese markets
  • Customer service responses times can be slow
  • Known to fake trading volume

As it stands, OKEx is among the most popular exchange platforms, and currently serves more than 20 million customers in over 100 countries.

Unlike most Bitcoin exchanges, OKEx offers both spot and derivatives trading functionality and supports a wide variety of different cryptocurrencies and tokens. In total, the exchange offers perpetual swaps and traditional futures for nine different crypto assets, including BTC, XRP, ETH and TRX. Users can also deposit through wire transfer or credit card to buy Bitcoin and other cryptocurrencies with fiat at reasonable prices.

 

OKEx is commonly considered to be the second-largest cryptocurrency exchange by trading volume as its BTC futures see around $1.5 billion in daily trade volume. Additionally, OKEx has some of the lowest fees in the market—with a 0.02% maker fee and a 0.05% taker fee for futures and perpetual swaps. These can be reduced for higher volume traders and OKB token holders.

The website is relatively easy to navigate, and the spot, futures and perpetual swaps platforms are all accessible to beginners and experts alike. Customer support is also readily available, since OKEx offers both phone support and email-ticket support, in addition to a well-polished help center.

Overall, the platform is considered an extremely safe place to trade Bitcoin, as the exchange has never been hacked—using a combination of cold storage wallets and distributed server clusters to stay that way.

Binance

binanceWidely recognized as the most liquid spot exchange, Binance also offers a hugely popular futures trading platform, which offers 11 different perpetual futures, covering most popular cryptocurrencies in addition to some unique ones, including Chainlink (LINK) and Stellar (XLM). This platform stands apart from the competition thanks to its extremely low trading fees and 125x leverage for its BTC/USD perpetual contract.

PROS

  • Huge variety of products and services available
  • Impressive futures volume, despite its newness
  • Low trading fees
CONS

  • US customers are blocked
  • Hacked for $40 million, but reimbursed customers
  • No traditional futures

Binance was founded in 2017 by Changpeng Zhao and Yi He, two innovators experienced with trading systems. Since early 2018, the exchange has become widely recognized as the world’s biggest Bitcoin exchange.

Although futures contract products were added to the Binance platform only recently, the BTC/USD perpetual already racks up more than $1 billion in 24-hour trading volume.

binance futures exchange

Binance offers a wide range of products and services, including a staking and lending platform, spot exchange, and a rapidly expanding futures platform.

A clean and intuitive trading interface is crucial and Binance definitely got the memo. The exchange has a beginner-friendly UI and a simple to use mobile app. The website is also available in numerous different languages and offers simple, but responsive support through live chat and an internal ticket system.

Although Binance has been hacked in the past, the exchange covered all the losses using its Secure Asset Fund for Users, demonstrating impressive integrity and commitment to its users. Nonetheless, the platform still keeps the majority of user funds in cold storage and offers a wide variety of account security options.

Binance uses a VIP system to calculate fees. Binance Futures fees start at 0.02% and 0.04% for makers and takers respectively but can be reduced to as low as 0% maker and 0.017% taker fees for VIP 9 users.

Benefits of Bitcoin Futures

Besides being an excellent tool for speculating on Bitcoin prices and hedging again price risk, Bitcoin futures have several benefits that make them worth considering as part of any solid trading strategy.

Cheap to trade

Unlike most spot Bitcoin exchanges, Bitcoin futures trading platforms tend to offer extremely low fees, which makes them attractive to both high volume and low volume traders. Market makers can often also receive a rebate for adding liquidity to the market, which can range between 0.01% and 0.025% of the trade size.

These low fees and market maker rebates help ensure Bitcoin futures markets remain extremely liquid, helping to keep spreads low and preventing slippage during settlement. Overall, this ensures traders keep more of their profits, and don’t need to worry about unexpected losses due to slippage.

Efficient use of capital

By far one of the major benefits of bitcoin futures contracts, and arguably the main reason why they’re so popular is the fact that they can be traded on leverage. This essentially means traders can open positions far larger than their balance by temporarily borrowing capital from the futures trading platform or other traders.

Since most bitcoin futures trading platforms offer up to 100x leverage, this means traders can multiply their profits by up to 100x compared to trading without leverage. This essentially allows even those with limited capital to turn a serious profit if they’re able to accurately predict the market.

Extremely liquid

Cryptocurrency futures aren’t just cheap and efficient to trade, they’re also extremely liquid, which means those with large positions usually won’t have any liquidity issues. As a matter of fact, the most liquid Bitcoin futures achieve massively higher trade volume than Bitcoin trade volume on the most popular spot exchanges, such as Binance and Bittrex.

Because of this, traders can expect little to no slippage when trading, regardless of the prevailing market conditions, since most prominent bitcoin futures trading platforms have very low spreads even during times of high volatility. This means you can focus more on your trading strategies, rather than worrying about dealing with slippage.

Cons and Risks of Bitcoin Futures

Although Bitcoin futures have a huge number of benefits, it is still quite possible to lose money while trading them, particularly if traders neglect to maintain adequate caution. Beyond this, Bitcoin futures also have their fair share of risks which can make them unsuitable for some traders—two of the main ones are outlined below:

Risk of account liquidation

Although trading Bitcoin futures on margin (with leverage) can multiply your exposure to beneficial price movements, it also works in the opposite direction, and can multiply losses just as quickly. As such, even small adverse movements can cause significant losses when trading with high leverage.

Because all Bitcoin futures platforms enforce margin requirements to prevent bankruptcy and ensure that trade winners get their expected profits, traders are at risk of automatic liquidation if their account balance falls below the required margin requirement.

Beyond this, traders also need to be aware of potential stop hunting—a strategy employed by large market participants to drive the price of an asset to a level that triggers the stop loss of small traders. This is more of a risk on smaller, less liquid platforms and is mostly a concern for those trading with a tight stop loss, high leverage or both.

Largely unregulated exchanges

As it stands, the large majority of cryptocurrency futures exchanges are unregulated. This means they are not licensed to offer futures products. This is because most countries do not consider cryptocurrencies like Bitcoin to be money, and hence these platforms aren’t technically required to apply for a money transmitter license unless they directly handle fiat currencies—and few do.

Since licensed platforms need to meet stringent guidelines on how user funds are handled and stored, as well as ensure they have a viable plan to remain solvent long-term, it stands to reason that unlicensed platforms might not adhere to these same quality standards. As such, there may be a higher risk trading on unregulated platforms, since traders have few protections in place should anything go wrong.

Comments

  1. Hey Pascal,

    Very impressive overview you have made here.

    I’d be grateful if you could give us your expert opinion on mushino.

    We are a new platform that just launched. We are curious to hear your thoughts on the platform

    Reply

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