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Best Coins for Futures Trading In 2024

Written by Charles

Written by:

Charles

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Hey there Experience: None

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This article has been reviewed by crypto market experts at SCM to ensure all the content, sources, and claims adhere to the highest standards of accuracy and reliability.

Last Updated on June 6, 2024

Futures trading in the cryptocurrency market allows you to speculate on the price movement of digital assets without having to own the underlying coins directly.

When considering which coins are best for futures trading, looking at factors such as liquidity, volatility, and market capitalization is essential.

Liquidity ensures that you can quickly enter and exit positions, while volatility can offer the potential for higher profits but also increases the risk. Market capitalization reflects the stability and size of the asset, which might affect its susceptibility to market manipulation.

Cryptocurrencies like Bitcoin and Ethereum have long been famous for futures trading due to their high liquidity and well-established market presence.

However, other coins like Binance Coin and Solana are increasingly favored for their solid performance and growing ecosystems.

It’s important to remember that futures trading carries risk, as the market can move rapidly and unpredictably. Therefore, staying informed about market trends and having a keen awareness of the coins you choose to trade is imperative for your strategy.

Top Best Coins for Futures Trading

When considering futures trading in cryptocurrency, certain coins rise to prominence due to their robust platforms, technological promise, or strong market positions.

  • Bitcoin (BTC): As the first and most well-known cryptocurrency, Bitcoin often exhibits high liquidity, making it a mainstay for futures trading. Your familiarity with its market behavior can be an asset.
  • Ethereum (ETH): Known for its smart contract functionality, Ethereum’s influence on the DeFi sector renders it a significant choice for futures markets with its frequent updates and widespread usage.
  • Solana (SOL): SOL’s fast transaction speeds and low fees contribute to its burgeoning reputation. Its performance and adoption rate make it a strong candidate for futures trading.
  • Polygon (MATIC): With its scalability solutions for Ethereum, MATIC has positioned itself as a coin to watch, offering potential growth opportunities in futures trading.
  • Cardano (ADA): ADA’s research-driven approach to solving industry-wide problems offers a stable investment option for futures traders.
  • Dogecoin (DOGE): While it started as a meme coin, DOGE’s volatile price actions attract investors looking for high-risk, high-reward futures trading scenarios.
  • Ripple (XRP): With its aim to facilitate cross-border payments, XRP presents a coin that could see increased utility and, consequently, heightened interest in futures trading.
Coin Prominent Feature Relevance to Futures Trading
Bitcoin (BTC) Liquidity and Recognition Stable mainstay for futures
Ethereum (ETH) DeFi and Smart Contracts High usage and innovation
Solana (SOL) Transaction Speed Emerging market presence
Polygon (MATIC) Scalability Growth linked to Ethereum’s success
Cardano (ADA) Research and Development Stability and progress
Dogecoin (DOGE) Price Volatility High-risk and reward potential
Ripple (XRP) Payment Solutions Utility-driven market interest

For futures trading, you should look for cryptocurrencies that offer a combination of an active community, innovative use cases, and market stability, which these coins provide.

#1. Bitcoin (BTC)

Bitcoin

Futures trading in Bitcoin (BTC) allows you to speculate on the price of this premier cryptocurrency without the need to own it directly. When you trade BTC futures, you’re essentially entering a contract to buy or sell a specific amount of Bitcoin at a predetermined price at a future date.

Benefits of Trading Bitcoin Futures:

  • Hedging: You can protect your portfolio against price volatility.
  • Leverage: Gain more considerable exposure with less capital, amplifying potential returns.
  • Liquidity: BTC futures markets are generally liquid, facilitating easier entry and exit.

Considerations for Trading BTC Futures:

  • Market Risk: The price of Bitcoin can be highly volatile.
  • Leverage Risk: While leverage can increase returns, it can also magnify losses.
  • Regulatory Landscape: Ensure you comply with cryptocurrency futures regulations in your jurisdiction.

BTC futures can be traded on various platforms, each with its own set of features:

  • TradeStation: Known for its customizable platform and access to a wide range of products.
  • Kraken Futures: Offers a user-friendly experience and performant API trading.
  • BitMEX, CME, and Binance: Provide platforms for trading futures with differing contract specifications and margin requirements.

Before you start, research and understand the contract specifications, such as contract size, margin requirements, and settlement process—whether it’s cash-settled or if you need to settle in Bitcoin. Choose a platform that best suits your trading preferences and ensure it aligns with your risk tolerance and trading strategy.

#2. Ethereum (ETH)

Ethereum

Ethereum, often represented as ETH, is a robust choice for futures trading due to its significant market presence and liquidity. As the blockchain platform behind the second-largest cryptocurrency by market capitalization, Ethereum offers you a diversified investment option outside of Bitcoin.

Key Features:

  • Liquidity: With a high trading volume, ETH futures markets tend to be highly liquid, facilitating quick entry and exit.
  • Exposure: You can gain exposure to Ethereum price movements without owning the cryptocurrency.
  • Hedging: Futures can mitigate your risk against Ethereum’s price volatility.
  • Leverage: Trading platforms offer leverage, which can amplify your returns, but be cautious as it also increases risk.

Selected Ethereum Futures Platforms:

  • ProShares Ether Strategy ETF
  • Kraken
  • Binance
  • Various leverage trading exchanges

Considerations for Trading ETH Futures:

  • Understand bid-ask spreads to evaluate trading costs.
  • Keep informed about contract expiration dates and conditions.
  • Assess settlement terms—either physical delivery of ETH or cash settlement.
  • Monitor the funding rate if trading perpetual futures contracts.

While Ethereum offers diverse opportunities for future trading, the inherent volatility can lead to significant gains or losses. Ensure you have a solid risk management strategy before participating in ETH futures markets.

#3. Litecoin (LTC)

Litecoin (LTC) represents a popular choice for futures trading due to its established market presence and consistent liquidity.

In futures trading, you agree to buy or sell LTC at a predetermined price at a specified future date. This lets you speculate on Litecoin’s price movements without owning the cryptocurrency.

Critical Characteristics of Litecoin Futures:

  • Hedging: If you already own LTC, you can use futures contracts as a hedge to mitigate your exposure to price volatility.
  • Leverage: You may trade LTC futures using leverage, amplifying your potential gains and increasing risks, as losses can exceed your initial investment.

When you consider futures trading with Litecoin, it’s crucial to understand the role of leverage:

Leverage Description
10x Trading a $100 contract lets you control $1,000 worth of LTC.

However, a price drop in Litecoin beyond a certain percentage can lead to liquidation of your position if it falls past the margin you have provided.

When examining platforms for trading LTC futures, look into:

  1. Platform Reliability: Select exchanges like Kraken or Binance Futures, known for their robustness.
  2. Trading Interface: Ensure the exchange offers a user-friendly and intuitive interface.
  3. Fees: Be aware of the ffutureing costs and how they might affect your return on investment.

#4. Ripple (XRP)

Ripple

Ripple’s token, XRP, operates within a distributed ledger system for swift and cost-effective transactions. Rather than solely serving as a currency, XRP facilitates the exchange of various asset types on its network.

Key Benefits:

  • Speed: Transactions on the Ripple network settle in seconds.
  • Low Cost: Each transaction costs just 0.00001 XRP.
  • Utility: XRP can be used to hedge against market volatility when trading futures.

When engaging in XRP futures trading, you enter an agreement to buy or sell a specific amount of XRP at a predetermined price on a certain date. This tool is valuable if you want to gain exposure to XRP’s price movements without direct ownership or if you hedge against possible price fluctuations.

Current Market Position:

  • Price: Around $0.60, subject to market fluctuations.
  • Market Capitalization: Approximately $33.5 billion.
  • Liquidity: High liquidity due to its position within the top cryptocurrencies.

While the Ripple network’s primary aim is to enhance cross-border money transfers for financial institutions, XRP has also carved out a niche in the futures market, providing traders with a blend of stability and potential for growth. However, always consider risk factors and conduct thorough research before trading.

#5. Polkadot (DOT)

Polkadot operates as a multi-chain application environment where you can perform transactions privately and across blockchains. When considering Polkadot (DOT) for futures trading, you’re engaging with an asset known for its interoperability and innovation in the blockchain sector.

Futures Trading on Polkadot: Key Benefits

  • Interoperability: Trade a coin that facilitates cross-blockchain transfers.
  • Innovation: Participate in one of the blockchain’s most forward-thinking communities.

Current Market Position

The dynamics of Polkadot’s price are critical in futures trading. As of the most recent data, Polkadot’s price can exhibit volatility, a common trait among cryptocurrencies.

Metric Value
Current Price* USD 8.47
24h Trading Volume USD 2.56M
Market Cap ~ USD 0.08B
Supply 1.35B circulating coins

*Prices are subject to market fluctuations.

Futures allow you to speculate on the price of DOT without holding the underlying asset. With the option to leverage and hedge, futures offer flexibility in your investment strategy.

Historical Performance

DOT reached its peak price in November 2021 at $55.090 USDT. You should track historical performance as part of your strategy, but remember that past performance doesn’t indicate future results.

When trading DOT futures, you are equipped to capitalize on both the growth potential and downturns of the market. Make well-informed decisions based on the latest data and your assessment of the market’s direction.

#6. Solana (SOL): High-speed blockchain

Solana

When you explore futures trading in cryptocurrency, your attention to speed and throughput is vital.

Solana (SOL) stands out as a high-speed layer-1 blockchain. It is adept at processing transactions with remarkable efficiency. Born in 2017, Solana has carved a niche by offering throughput that surpasses many other blockchains due to its unique Proof-of-History (PoH) consensus mechanism.

Throughput and Transaction Speed

  • Transactions Per Second (TPS): Solana boasts a high TPS rate, accommodating thousands of transactions, starkly contrasting to the handful processed by Bitcoin and Ethereum.
  • Confirmation Times: Featuring sub-second confirmation times, you get almost instant transaction finality.

Cost-Effectiveness

  • Transaction Fees: You’ll find the fees on Solana negligible, a fraction of a cent for most operations, making high-volume trading less burdensome.

Solana Futures Trading

  • Accessibility: Futures trading on platforms like Kraken allows you to gain exposure to Solana’s price movements without the need to hold the asset.
  • Market Performance: In 2024, SOL’s total value locked surged, signaling strong trader interest in its futures.

#7. Cardano (ADA): Research-driven blockchain

Cardano, represented by its native token ADA, stands out in cryptocurrencies with its firm commitment to a research-based framework. You’ll observe a distinctive approach where peer-reviewed research is the backbone of development, differentiating Cardano from many other blockchain projects.

Why Cardano?

  • Security and Scalability: By leveraging a proof-of-stake (PoS) consensus mechanism, Cardano aims to balance the needs for security, scalability, and decentralization.
  • Peer-reviewed Development: Each protocol improvement and update proceeds through rigorous academic scrutiny, ensuring a stable and well-founded infrastructure for decentralized applications (DApps) and smart contracts.

Cardano’s Advancements:

  • Multilayer Structure: The blockchain is structured into two main layers: the Cardano Settlement Layer (CSL) and the Cardano Computation Layer (CCL). This separation facilitates flexibility and easier maintenance.
  • Innovative Contract Capabilities: The platform provides a secure and robust environment for executing smart contracts, which is essential for creating a wide range of decentralized financial applications.

Cardano’s Utility:

  • Cardano isn’t just speculative; its token ADA is used for various utilities within its ecosystem, including participating in network governance.

Criteria for Choosing the Best Coins for Futures Trading

When selecting the best cryptocurrencies for futures trading, your primary concern should be market liquidity and trading volume.

Highly liquid markets typically feature abundant buy and sell orders, allowing you to enter and exit positions with minimal slippage.

  • Market Liquidity and Trading Volume: Ensure the cryptocurrency has a high level of liquidity to facilitate smooth trade execution.
  • Volatility and Price Trends: Higher volatility can lead to more significant profit opportunities and greater risks.

Additionally, the volatility and price trends of the cryptocurrency should be considered. While volatility can increase the risk, it can also provide lucrative trading opportunities if you can anticipate market movements accurately.

Assess historical price data to understand the coin’s price stability and trend patterns.

  • Project Fundamentals and Industry Impact: Investigate the underlying technology, use case, and team behind the cryptocurrency.

The project’s fundamentals and industry impact are equally important.

A cryptocurrency with a robust technological foundation, clear use case, and muscular development team will likely succeed in the long term.

Its impact on the industry can reflect its potential for growth and adoption, which in turn can affect its performance in futures trading.

  • Regulatory Environment and Legal Considerations: Familiarize yourself with regulations affecting cryptocurrency trading.

Lastly, the regulatory environment and legal considerations cannot be overlooked.

As cryptocurrencies are subject to an evolving regulatory landscape, stay informed about legal changes that could impact the trading of your chosen coins. Neglecting this aspect might expose you to unnecessary legal risks and financial losses.

Frequently Asked Questions

When engaging with futures trading, it’s crucial to be well-informed about the top cryptocurrencies to trade and to understand the strategy for selecting cryptos with an eye on long-term gains.

What are the top cryptocurrencies for futures trading on major platforms?

You’ll find that platforms such as Binance and OKX frequently facilitate futures trading for various popular cryptocurrencies.

Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) are typically leading choices due to their high market capitalization and liquidity.

Additionally, coins like Dogecoin (DOGE) and Aave have also been accessible for futures trading, catering to traders’ diverse interests and market coverage.

How does one select cryptos for futures trading focusing on long-term gains?

When selecting cryptocurrencies for futures trading, prioritize assets with solid fundamentals and a sustained history of market performance.

This means looking beyond momentary price movements and understanding the underlying technology, adoption rate, and developer activity.

Solid projects tend to recover from market fluctuations, making them suitable for futures trading with a long-term perspective.

Always couple this research with a risk management strategy, accounting for market volatility.

Conclusion

When considering the best cryptocurrencies for future trading, prioritize coins with high liquidity and a strong market presence.

Cryptocurrencies like Polygon (MATIC), Solana (SOL), Cardano (ADA), Uniswap (UNI), and The Graph (GRT) have been highlighted as potential options with significant future potential. Each has its unique attributes:

  • Polygon (MATIC): Famed for scalability solutions.
  • Solana (SOL): Valued for high throughput.
  • Cardano (ADA): Regarded for its security and robust intelligent contract platform.
  • Uniswap (UNI): A leading decentralized exchange token.
  • The Graph (GRT): Noted for indexing and querying data across blockchains.

When engaging in futures trading, it’s crucial to:

  • Understand market liquidity.
  • Opt for derivatives with precise trading mechanisms.
  • Select appropriate leverage for positions.
  • Be informed about the use of various order types.

Futures trading platforms such as Binance Futures, Coinbase Advanced, and PrimeXBT offer diverse options for future contracts.

These include USDⓈ-M Futures and COIN-M Futures. Utilize these platforms to execute trades effectively with tools suited to your trading strategy.

Your approach should involve careful assessment and an informed strategy, considering the inherent risks associated with futures trading.

By staying informed and selecting the right products, you can confidently navigate the crypto futures market.

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