Where to trade crypto futures in 2024?

What are crypto futures?

A crypto future can be described as a derivative trading product that enables traders to trade the underlying crypto asset at a pre-determined price on a specified date in the future.  

In the traditional sense, the term derivative refers to a type of financial contract whose value depends on the underlying asset or group of assets. Prices of derivatives stem from fluctuations in the underlying asset, and therefore, derivatives can be used either to mitigate risk or assume risk with the expectation of bigger gains. 

Similar to traditional futures contracts, crypto futures enable traders and investors to speculate on future price movements of the asset in question. Looking at market conditions, traders typically take long positions when the underlying asset rises and short positions when the underlying asset’s price falls. 

Futures trading within the crypto world has gained a lot of popularity. If you are a frequent reader, you probably remember that we discussed this topic in our 'What are crypto futures contracts?'.

Types of crypto futures contracts

There are divergent types of crypto futures and each has its features. Crypto futures are complex financial instruments that require an in-depth understanding of the crypto futures markets and effective risk management strategies.

For starters, perpetual futures represent contracts with no expiration date – they are created to keep up with the underlying asset's spot price and are being settled regularly. 

Secondly, delivery futures are futures contracts with a determined expiry date at which the contract must be settled. In other words, the buyer must purchase and the seller must deliver the underlying asset at the agreed price. 

On the other hand, options-based futures refer to contracts that provide traders the right, yet not the obligation, to buy or sell at a specified price before the contract expires. 

Finally, the crypto space has inverse futures as well; they can be defined as futures contracts that use a cryptocurrency as its base currency instead of traditional fiat currencies such as the U.S. dollar. The value of the futures contract is inversely linked to the underlying crypto.

How does crypto futures trading work?

Crypto futures contracts function similarly to its traditional counterparts – there are two parties that agree to trade a determined amount of the underlying crypto asset at a set price on a future date. Essential components of a futures contract are the size of the contract, the settlement method and the expiration date. 

Futures trading differs from spot trading where transactions are conducted immediately. When trading futures, prices are locked in for future execution which presents a specific trading strategy. 

Therefore, one of the key characteristics of futures trading presents leverage since it enables users to control broad positions with smaller amounts of capital. If the market moves in the favourable direction, it can produce big profits but it also increases the risk of potential losses. 

On the other hand, margin represents the collateral traders must deposit to open a position and maintain it. Thereby, there are two types of margin requirements: the initial margin which represents the amount required to open a position, and the maintenance margin as the minimum deposit that must be maintained in the trader’s account to keep the position open. 

Finally, futures contracts must be settled until the expiration date and there are two main ways these contracts can be settled; the first settlement method is physical delivery when the buyer buys and receives the cryptocurrency upon settlement. The other method refers to cash settlement as the difference between the contract and market prices is settled in cash. 

If you are new to the crypto space, understanding such advanced trading tools can be a bit challenging. Take a look at the crypto trading course at our Learn Crypto Academy to upgrade your knowledge and successfully navigate the crypto market.

How to choose a crypto futures trading platform?

A crypto futures trading platform is an exchange where users can trade crypto futures and options products. Many also provide leverage or margin trading, enabling traders to take broad positions on crypto markets without the need to own or buy the cryptocurrency.

Before choosing the best crypto futures trading platform, let's explain important factors to consider when evaluating suitable platforms. Selecting the right platform for futures trading is crucial for both novice and experienced traders.

Fees

Each crypto futures exchange charges a fee to provide crypto futures trading and these fees vary. Trading fees are present at divergent stages of futures trading; some crypto futures exchanges lay down a tiered fee structure that incentivises broad traders as the more they trade, they get bigger discounts and benefits.  

When choosing a platform for futures trading, it is essential to take a look at competitive trading fees at several exchanges and compare their structure – take some time to compare these structures, understand the maker/taker fee and check if there are any hidden costs. 

The most common fee that is charged by futures trading platforms refers to maker and taker fees. To find out more about trading fees on popular crypto exchanges, why not read this article: 'Crypto Exchange Fees 2024'.

Security

When choosing a crypto futures trading platform, always check whether it is compliant with global security and regulatory standards. A good platform should encompass robust security measures such as two factor authentication (2FA), proof of reserves, cold storage or triple-layer asset protection. 

To protect your data and crypto assets, it is also important that the platform is legit and has a good reputation. A crypto futures trading platform needs to possess licences that are necessary to operate in various jurisdictions. Additionally, take a look at industry ratings and user reviews to check its reputation. 

Liquidity

Think of liquidity as the lifeblood of a successful market – high liquidity means that traders can enter and exit positions quickly and without affecting the market price significantly. High liquidity can minimise slippage which is especially important for volatile markets. 

Liquidity presents a metric that tells users how easy it is to conduct trades close to the current market price. High liquidity amounts to a more resilient market which cannot be disrupted easily by large trades. 

This trait is important for any legit and healthy market. In contrast to liquidity, illiquidity amounts to orders having too much impact on prices and makes it easier for malicious actors to manipulate prices. 

Market volatility can be linked sometimes to trades made by whales. When whales buy, the prices go up, and when they sell, prices go down. However, it is not that simple - to understand whales as participants within traditional financial and crypto markets, we suggest reading this article: 'Crypto Whales Splashing the Market: Traditional Participants Swimming in the Crypto Sea'.

Customer support

Since crypto markets work round the clock, crypto futures trading platforms need to provide 24/7 customer support and fast response rates through phone, e-mail or live chat.  

Responding rapidly and resolving urgent matters are the main characteristics of customer support. Therefore, when choosing the right platform assess the quality of their customer support service because it could enhance your trading experience.

Availability of trading tools and features

A futures trading platform with innovative and sophisticated trading tools and features can help in decreasing risks and minimising losses. Such tools mainly include automation and advanced charting tools. 

Many crypto platforms also provide a demo mode which represents a simulated space where users can practise trades and try out divergent trading strategies under live market conditions and dynamics.

Educational resources

We have mentioned many times in our articles how education is important for your crypto journey. Any crypto futures trading platform should possess a wide repository of educational resources and learning materials such as manuals, courses, tutorials and blogs. 

In addition to learning resources, it is always good to see a user-friendly and responsive interface design which enables users to easily access tools and features as well as conduct trades smoothly across different devices.

Regulatory compliance

Exchanges are subject to divergent regulations depending on the jurisdiction in which they operate. Compliance plays an important role in making crypto markets legitimate and stable worldwide. For example, it is necessary to adhere to AML and KYC regulations. 

Regulatory measures became important within the crypto industry to prevent illicit activities such as money laundering, fraud and tax evasion and ensure full security and transparency. 

Over the past few years there have been many cases of crypto platforms not being compliant with existing regulations which affected their business and the trust of their users. 

Futures trading in the crypto market is considered highly erratic and can result in significant losses. Risks of trading crypto futures include broad price volatility, leverage and bigger losses. Apart from effective risk management techniques and knowledge, it is also good to know that the platform is legit and compliant with relevant regulations to minimise other risks as well.

Top crypto futures trading platforms

When dealing with crypto assets and exchanges, always do your own research and rely on your knowledge. Financial responsibility plays an important role within the crypto space and ensures a more successful trading experience.

As mentioned above in the text, choosing the right crypto futures trading platform is important for both novice and seasoned traders. We have made a list of some of the top crypto futures trading platforms in 2024. Let's check these futures trading platforms out.

Binance futures trading

Binance Futures is a part of Binance, a well-known cryptocurrency exchange which encompasses a wide range of futures contracts with approximately 340 derivative trading pairs.  

Binance Futures stands out with its diversity when compared to some other crypto futures trading platforms that may lay perpetual futures, options or cryptocurrencies. 

Since it is one of the largest crypto platforms, Binance includes high liquidity which is important for conducting trades more efficiently. High liquidity also means minimal slippage on crypto futures trades.  

Additionally, the platform provides reduced trading fees through the use of Binance Coin (BNB). 

This futures trading platform provides tools such as real-time charting, margin trading and divergent order types, along with financial products such as Launchpool and Binance Earn which are helpful to traders that want to diversify their trading strategies.

On the other hand, the platform faced regulatory scrutiny in several countries and its complexity can be challenging for new traders.

Kraken futures trading

Kraken is also one of the biggest crypto futures exchanges standing out with a wide range of digital assets and robust security measures. Traders have access to major cryptocurrencies and a variety of other coins.

It has been stated by users that Kraken’s user interface is beginner-friendly and easy to manage. The platform is also praised for its security measures; it can be said that Kraken is based on asset versatility, user-friendly approach and robust security features. 

When it comes to disadvantages, it has been claimed that the platform provides lower leverage when compared to other futures trading platforms as well as a lengthy KYC procedure. 

KuCoin futures trading

KuCoin is deemed a popular cryptocurrency futures exchange on the futures market as well. Apart from a user-friendly interface and design, the platform also provides a wide array of digital assets, including memecoins.  

The platform is well-known for its high trading volumes and wide futures markets as it supports both inverse and linear future contracts. Additionally, the platform encompasses leverage up to 100x with a bit higher fees.  

In addition to higher fees than the industry average, KuCoin also doesn’t provide options trading.

Bybit futures trading

When it comes to trading products, futures offerings and listed crypto assets, Bybit is similar to Binance. It is interesting that Bybit was first created as a futures trading platform back in 2018 and incorporated spot markets subsequently.  

This futures trading platform is known for its high leverage limit which can reach up to 100x on certain futures contracts. 

The Bybit futures trading platform offers perpetual futures for a wide range of cryptocurrencies as well as delivery futures with 6-month expiry date. The platform charges 0.055% per trade. 

As for its cons, it has been stated that this futures trading platform provides limited delivery futures for Ethereum and Bitcoin.

MEXC futures trading

The MEXC futures trading platform is specialised in the trading of perpetual futures contracts and provides two types of these: those backed by USDT and those settled in the underlying cryptocurrency.

MEXC has been praised for its wide range of trading options, involving crypto futures trading pairs and access to a wide array of altcoins. This diverse selection of crypto assets amounts to high leverage as well. 

Another benefit provided by this futures trading platform are low trading fees as it charges only 0.02% when trading futures.  

However, MEXC doesn’t support options trading and some trading pairs have been reported to have low liquidity which affected the execution of the trade. While the availability of some advanced features is great for experienced traders, the platform’s interface could be a bit challenging for new users.

Bitget futures trading

Even though Bitget may be viewed as a newcomer when compared to some other crypto exchanges, the platform gained popularity rapidly due to its broad asset support and certain innovative features.  

Bitget provides users with a wide range of futures contracts, involving those settled in USDT, USDC, and the underlying cryptocurrency. Additionally, it offers access to several advanced features such as copy trading and trading bots. 

It has been stated that the platform charges low transaction costs and provides bonuses and discounts for new traders as well.