Summary: As the demand for cryptocurrency futures trading intensifies, it becomes increasingly important for investors to identify the best platforms to trade. This strategy enables investors to capitalize on cryptocurrency price swings, profiting from both rises and falls. However, navigating the extensive selection of cryptocurrency futures platforms can be daunting.
In this analysis, we spotlight the top 5 cryptocurrency futures trading platforms. Our evaluation focuses on crucial metrics like security, transaction fees, market liquidity, and user experience. Here's a quick look at the best platforms we've examined:
- Bybit Futures - Best Overall for Futures Trading
- Binance - Best for Institutional Investors
- Phemex - Best for Altcoin Pairs
- eToro - Best Multi-Asset Futures Platform
- DYDX - Best Decentralized Futures Platform
Best Crypto Futures Exchange - Bybit
- Trade 400+ Cryptos with 0.01% Maker and 0.06% Taker Fees
- Deepest liquidity on the widest variety of crypto assets for futures contracts.
- Non-KYC exchange with proof-of-reserves that show customer funds are backed 1:1.
Best Crypto Derivatives Exchanges
Our ranking of the top 5 cryptocurrency futures and derivatives platforms was a calculated process. We evaluated each platform's security features, trading fees, market liquidity, and user experience. Security assessment involved exploring encryption and fund storage protocols, while fee evaluation compared the platform's rates with industry standards. We scrutinized market liquidity through order book depth and spread, and analyzed user experience by assessing usability, support, and educational resources.
Remember, this ranking serves as a guide, not financial advice. Your individual needs and risk tolerance should dictate your platform choice. Now, let's delve into a more detailed breakdown of each of the top 5 platforms.
Bybit has emerged as the fastest-growing platform for crypto futures trading. It offers more than 400 coins for trading, without requiring KYC or ID verification from its customers. Bybit is among the few exchanges that permit traders to speculate with up to 100x leverage on all the crypto assets available on their reliable and time-tested platform.
They are regarded as the best futures exchange for digital assets due to their deep liquidity and minimal fee structure, beginning at 0.05% for Taker Orders and 0.01% for Maker Orders. Since the recent insolvency of FTX, Bybit has become the preferred destination for traders. For additional details, you can refer to our comprehensive Bybit Review.
2. Binance Futures
Binance is widely recognized as a leading global platform for both Bitcoin futures trading and crypto futures trading. The platform supports trading of various cryptocurrencies, including Bitcoin, Ethereum, Aptos, Solana, and hundreds of other assets, against Tether (USDT) with up to 125x leverage. Traders from all around the world can easily create a Binance Futures account within minutes and benefit from the best Bitcoin and crypto futures trading platform available on any exchange.
In addition to its extensive range of features, Binance also provides its users with high levels of security and liquidity, making it an ideal choice for institutional investors and retail traders alike. For more information, you can read our comprehensive Binance Review.
Phemex is a new derivatives platform that has grown to over 5 million users since being launched in 2019. Their exchange offers deep liquidity on over 150 crypto pairs with up to 100x leverage on their secure and highly performant centralized trading platform. Phemex is widely regarded for its low fees, tight spreads and feature-rich exchange that includes staking, spot trading, options and more.
Another advantage of Phemex is that they do not require verification or KYC to register and trade. This means you can sign up with an email address and password and deposit stablecoins or other digital assets like Bitcoin and Ethereum to start trading. For a deeper dive, read our extended Phemex Review.
eToro is the world's most extensive multi-asset brokerage platform, enabling traders to leverage trade a wide range of assets, including cryptocurrencies, stocks, commodities, and more. It is highly regarded for its low fees, speedy fiat currency deposits, and diverse asset selection.
One unique advantage of this platform compared to the other exchanges on this list is that it allows traders to trade crypto stock and ETF futures contracts. This means that traders can go long or short on stocks such as Coinbase, Robinhood, and Microstrategy, which are correlated with the price of crypto assets. For more information, you can read our comprehensive eToro Review.
Dydx is a decentralized finance (DeFi) platform built on the Ethereum blockchain. It provides a suite of financial products and services, including margin trading and borrowing, lending, and trading of crypto assets. The platform is designed to be transparent, secure, and accessible to a wide range of users, and it operates using a decentralized governance model, with users collectively making decisions about the direction and development of the platform.
The platform's use of smart contracts and blockchain technology helps to ensure that transactions are secure, transparent, and tamper-proof. They have the deepest liquidity to trade the top crypto pairs like BTC, ETH, AVAX, NEAR, LUNA, ONE and many others. Read our DYDX Review for more information.
Why should I trade Crypto Futures?
Crypto futures offers two key advantages for digital asset investors and speculators. The most common reason for sophisticated and institutional investors is to hedge price risk. Derivatives contracts allow investors to mitigate the risk of a falling price by taking a short futures position. This will help mitigate losses by providing additional profit that hedges exposure from holding spot assets like BTC and ETH.
The other common reason is to speculate on price direction. Crypto leverage trading enables the opportunity for traders to truly speculate on the asset, even with up to 100x leverage if they are extremely confident.
How do you Trade Futures in Crypto?
Trading crypto futures and derivatives contracts is easy thanks to the wide variety of highly liquid centralized trading platforms. If you are new to futures trading, you can follow this short 4 step guide on how to get started with no KYC or verification required.
- Create Account: Sign up to Bybit (5% off fees) with an email address & password only.
- Deposit Funds: Deposit funds to the Bybit platform via Bank Transfer, Credit Card/Debit Card or a Crypto Deposit (e.g BTC, ETH, USDT or USDC).
- Find Markets: Find the Crypto derivatives or futures market you want to trade on the Bybit platform (e.g BTC/USD or ETH/USD).
- Execute Trade: Input the amount of USD you want to Long or Short and input your leverage (25x), then execute your trade.
Is Crypto Futures Trading Legal?
In most countries, trading crypto futures is usually legal, mirroring the treatment of regular cryptocurrency trading. The specific legality and regulation of crypto futures, however, may differ based on jurisdiction. In the U.S., crypto futures trading is legal and falls under the regulatory purview of the Commodity Futures Trading Commission (CFTC), which deems crypto assets as commodities, thus claiming jurisdiction over futures and other derivatives of these assets.
Despite the U.S. legal status and CFTC regulation, other countries might have distinct regulations and restrictions. Hence, it's recommended to review your specific country's laws and regulations before participating in any crypto trading activities, including crypto futures trading.
What are the Fees?
Trading futures and derivatives contracts involves different fees than standard spot trading on traditional exchanges like Coinbase or Kraken. Here are some of the common fees and costs associated with trading cryptocurrency futures contracts.
- Trading Fees: Much like spot trading, Bitcoin Futures contracts will typically charge a commission for
a buy or sell.
- Funding Fees: Fees can apply for certain Bitcoin Futures contracts when you keep
a contract open through a certain time period.
- Extension Fees: Fees can apply if you extend a Bitcoin Futures contract beyond its close date.
- Leverage Fees: When you are margin trading Bitcoin, you are borrowing money to use leverage on your trades. There is generally an interest payment attached to borrowing that money.
In conclusion, cryptocurrency futures trading is an exciting avenue for investors to take advantage of both the upward and downward trends of the crypto market. In this guide, we've explored five of the top crypto futures exchanges: Bybit, Binance, Phemex, eToro, and DYDX, each offering unique features, security measures, and various fees.
Whether you're a novice or seasoned trader, these platforms cater to different trading needs and preferences. It's crucial to understand your country's regulations about crypto futures trading before diving in, as it varies from jurisdiction to jurisdiction. So, equip yourself with this knowledge and start exploring the dynamic world of crypto futures trading.
Co-Founder & former Investment Banker (Finance MBA) turned Full-Time analyst and Head of Research at Buy Bitcoin Bank. Left traditional finance to pursue my interest in digital assets and decentralized finance.