Here’s a FAQ from the CME.

I traded futures for many years, and the platform is much more mature than any bitcoin exchanges. The means there can be a lot more volume, and it will be standardized.

Here are the implications:


1) Prices are standardized. For example, When current bid on bitfinex or GDAX is 10,500 I can bid 10,500.01. On CME, 1 contract is 5 BTC, so $50,000 contract goes up by $25 each increment. So if the bid is $50,000, I can’t bit $50,000.01, I can only bid $50,025.

2) Futures accounts are easy to open, trading is very cheap, and fund transfer is very easy. Even the cheapest bitcoin exchanges charge 0.1% trading now, which is $100 per $100,000. On the futures exchange, size doesn’t matter, so I can trade $100,000 for $2 fees. I’m trading on CME instead of bitfinex for sure.

3) The majority of trading volume will end up on the CME, because major traders already have futures accounts. This has happened in the past, for everything from cattle futures to gold. I predict only bitfinex or other large bitcoin exchanges will survive in a few years, as their volumes will decrease.

4) Trades are made and positions are taken as a derivative of the underlying, meaning no actual BTC changes hands. It is for delivery in the future. So there will be March, June, Sep, Dec deliveries, and each contract can trade different prices. This is a way for futures trader to set a price in the future.

5) They only trade BTC against USD. Again, standardization means CME doesn’t have to worry about BTC/EUR, BTC/GBP etc. Again, all big brokerages will allow customers to trade futures with any currency (EUR, GBP) deposit, since futures contracts are just bets to be settled at a later date and no real money changes hands at the time of the trade.

6) Volatility should decline. With increased volume from big players with actual future plans for the currency.. Also, Circuit breakers in place will stop trading for a period of time to reduce volatility. Academic studies are mixed on whether listing futures exchanges actually lower volatility.

7) Trading hours closes everyday from 4pm to 5pm. So not really 24 hours like current bitcoin exchanges, but close.

8) Margins are expected to be about 35%. So since 1 contract is 5BTC, valued at $50,000, you’ll need $17,500 on deposit just to trade 1 contract.