What Are Bitcoin Futures? How Crypto Traders Use Futures to Manage Risk

Originally published on NinjaTrader: https://ninjatrader.com/futures/blogs/what-are-bitcoin-futures/

Bitcoin futures offer traders a way to gain exposure to the price of Bitcoin without owning the cryptocurrency itself. For crypto traders, these contracts can serve as powerful tools for managing risk, hedging long-term positions, and speculating on price movement within a regulated environment.

Whether you’re new to futures or looking to expand your strategy into digital assets, understanding how Bitcoin futures work can help you trade more confidently in this volatile market.

What are Bitcoin futures?

Bitcoin futures are standardized agreements to buy or sell Bitcoin at a set price on a specific date in the future. Rather than trading actual Bitcoin, these contracts are cash-settled and traded on regulated exchanges like CME Group. This structure allows you to participate in crypto price movement without needing a crypto wallet or digital asset exchange account.

Like other futures contracts, Bitcoin futures are leveraged products, meaning you can control larger positions with a relatively small initial margin. While leverage may increase profit potential, it also introduces higher risk.

Why crypto traders trade Bitcoin futures

Futures contracts are designed to help traders react to changing market conditions. In the case of Bitcoin, where price volatility is the norm, futures can be a flexible tool to help you manage risk and identify opportunity regardless of market direction.

Here are a few common ways crypto traders use Bitcoin futures:

Hedging spot Bitcoin holdings

Crypto traders who hold physical Bitcoin (often referred to as spot BTC) can use futures contracts to help protect against downside risk. For example, if a trader is long in Bitcoin and expects short-term weakness, they might open a short futures position. If the price of Bitcoin drops, gains from the futures trade can help offset losses on the spot position.

This approach allows you to stay invested in Bitcoin while managing your exposure to volatility.

Speculating on price moves

Bitcoin futures offer the ability to go long (buy) or short (sell), making them ideal for traders who want to speculate on price movement. Long futures positions are used when anticipating a price increase; short positions are used when expecting a decline.

With leverage, you can gain amplified exposure — though it’s important to manage your position size and risk carefully, especially in volatile markets like crypto.

Diversifying a trading strategy

Because Bitcoin is an alternative asset class, trading its futures contracts can provide diversification within a broader futures strategy. Crypto often behaves differently than traditional markets, and incorporating Bitcoin futures can help you broaden your approach without leaving the futures ecosystem.

Bitcoin futures contract specifications

Before trading Bitcoin futures, it’s helpful to understand the contract specs, including size, tick value, and settlement details. These factors can impact how you manage positions and control risk. There are two main Bitcoin futures products available from CME Group:

Standard Bitcoin futures (BTC)

• Contract size: 5 Bitcoin
• Settlement: Cash settled
• Minimum tick: $5 per Bitcoin, or $25 per contract
• Trading hours: Nearly 24/6 through CME Globex

These full-sized contracts are geared toward more experienced traders or those looking for larger exposure to Bitcoin price movement.

Learn more about Bitcoin futures.

Micro Bitcoin futures (MBT)

• Contract size: 0.1 Bitcoin
• Settlement: Cash settled
• Minimum tick: $0.50 per contract
• Trading hours: Nearly 24/6 through CME Globex

These smaller-sized contracts offer a lower-cost way to access the same market dynamics. They can be ideal for traders managing account size, testing new strategies, or controlling risk more precisely.

Learn more about Micro Bitcoin futures.

How to trade Bitcoin futures with NinjaTrader

NinjaTrader provides a powerful platform for trading Bitcoin futures alongside other popular contracts like crude oil, gold, and the S&P 500 Index. With our award-winning tools, market data, and flexible order management, you can access Bitcoin futures in the same way you trade other futures markets.

NinjaTrader platform features include:

• Advanced charting and technical analysis
• Real-time market data
• Simulated trading environment
• Mobile, web, and desktop access
• Integrated order flow and market depth tools

New to trading? Practice risk-free in our simulated trading environment until you’re ready to go live.

Things to consider before trading Bitcoin futures

Bitcoin futures offer exciting opportunities, but they’re not without risk. Before you begin trading, here are a few things to keep in mind:

• Volatility: Crypto markets often experience large price swings, which can lead to rapid gains and losses.
• Leverage: Futures trading involves margin, which can magnify outcomes.
• Market knowledge: Having a strong understanding of both futures mechanics and crypto trends can help you make informed decisions.

Practicing trading Bitcoin futures in a sim environment can help you get familiar with contract behavior, margin requirements, and order execution before you commit real capital.

Expand your futures strategy with Bitcoin and NinjaTrader

Bitcoin futures continue to grow in popularity as traders look for ways to manage crypto exposure in a structured, regulated environment. Whether you’re hedging a spot position, speculating on short-term trends, or building a diversified futures portfolio, these contracts can provide valuable flexibility in your trading plan.

With NinjaTrader, you can analyze, simulate, and trade Bitcoin futures all in one place — using the same tools trusted by over 2 million users.