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"Perpetual futures -- swap contracts that never expire -- are by far the most popular derivative traded in cryptocurrency markets, with more than $100 billion traded daily. Perpetuals provide investors with leveraged exposure to cryptocurrencies, which does not require rollover or direct cryptocurrency holding. To keep the gap between perpetual futures and spot prices small, long position holders periodically pay short position holders a funding rate proportional to this gap. The funding rate incentivizes trades that tend to narrow the futures-spot gap. But unlike fixed-maturity futures, perpetuals are not guaranteed to converge to the spot price of their underlying asset at any time, and familiar no-arbitrage prices for perpetuals are not available, as the contracts have no expiry date to enforce arbitrage. Here, using a weaker notion of random-maturity arbitrage, we derive no-arbitrage prices for perpetual futures in frictionless markets, and no-arbitrage bounds for markets with trading costs. These no-arbitrage prices provide a useful benchmark for perpetual futures and simultaneously prescribe a strategy to exploit divergence from these fundamental values. Empirically, we find that deviations of crypto perpetual futures from no-arbitrage prices are considerably larger than those documented in traditional currency markets. These deviations comove across cryptocurrencies, and diminish over time as crypto markets develop and become more efficient. A simple trading strategy generates large Sharpe ratios even for investors paying the highest trading costs on Binance, which is currently the largest crypto exchange by volume."

The global Bitcoin futures market has hit a six-month high of $52 billion, according to data on Coinalyze.net. On October 18, 2020, the market total was at $4.5 billion, before increasing to $30 billion and $38 billion on October 21 and November 5 respectively. The share of this futures market is dominated by crypto exchange Binance, which holds a total of $16.1 billion worth of Bitcoin futures. In second place is crypto exchange Huobi's futures platform HuobiDM, with a total share worth $12.7 billion. https://coinalyze.net/futures-data/global-charts/bitcoin/

Coinbase has secured approval by the National Futures Association (NFA), a self-regulatory organization designated by the Commodity Futures Trading Commission (CFTC), to offer crypto futures to U.S. retail customers. The approval makes Coinbase the first crypto-focused platform in the U.S. to offer regulated and leveraged crypto futures alongside traditional spot trading, according to its announcement. https://www.coinbase.com/blog/coinbase-financial-markets-inc-secures-fcm-approval-to-bring-regulated

The U.S. Securities and Exchange Commission (SEC) hinted that bitcoin's price volatility may mean it's not yet ready to support an exchange-traded fund (ETF). The note called bitcoin is a "highly speculative" asset, and warned that investors in mutual funds that trade bitcoin futures may be taking on more risk than they're aware of. Going forward, SEC staff will "consider whether, in light of the experience of mutual funds investing in the Bitcoin futures market, the Bitcoin futures market could accommodate ETFs." https://www.sec.gov/news/public-statement/staff-statement-investing-bitcoin-futures-market

The bitcoin futures basis trade, in which a trader would buy bitcoin in the spot market today and sell long-dated futures, locking in the discrepancy between the two prices, has collapsed along with crypto prices. Hedge funds piled into the trade, which could previously reliably produce double-digit annual gains. Even better, the arbitrage was virtually risk-free, given that CME Group Inc. is the counterparty. However, the trade existed because long-dated futures were more expensive than shorter-dated ones, given that Bitcoin is inherently scarce and theoretically should rise -- a structure known as contango.

The Chicago Mercantile Exchange (CME) announced that it will launch, subject to regulatory review, options trading for its existing micro Bitcoin (BTC) futures and micro Ether (ETH) futures that will be 10% the size of the respective tokens. The futures options, expected to start trading on March 28, will come more than two years after the firm launched a BTC options trading product in January 2020 and more than four years since the group launched the first Bitcoin futures contract in December 2017.

"Bitcoin is not the money of the future and certainly not a future 'world money'. If it survives, which it may, it will probably be as a high risk asset class. As such, it may strongly increase in value in the future, but it could just as easily go the other way and end up valueless. The buyer beware."

Crypto-asset exchange FTX is working with CM-Equity on a pre-listing futures market for the Coinbase initial public offering (IPO). FTX first partnered with CM-Equity when launching its tokenized stock spot and futures markets in October 2020. FTX also launched a pre-IPO market for Airbnb the day before the firm's December 10 stock trading debut. However, FTX prohibits U.S.-based traders from accessing Coinbase futures.

CME Group intends to launch Ether futures starting February 8, 2021, pending regulatory review. The new contract will be cash-settled, based on the CME CF Ether-Dollar Reference Rate, which serves as a once-a-day reference rate of the U.S. dollar price of Ether. Ether futures will be listed on and subject to the rules of CME. They will join CME Group's Bitcoin futures and options, which have recently seen significant growth in their adoption from a broad array of participants, including institutional investors.

"The first US bitcoin (BTC) exchange-traded fund (ETF), "BITO", started trading on 19 October 2021. The fund debuted as one of the most heavily traded ETFs in market history, attracting more than $1 billion in assets in the first few days. Subsequently, the ETF accumulated a significant share of all short-term bitcoin futures contracts, reaching about one third of the underlying futures market just 10 days after its launch (Graph A, first panel). This box explains how the futures-based structure of BITO differs from that of more traditional, non-futures-based equity ETFs and analyses the possible implications for prices and risks."

Cboe Futures Exchange is putting its bitcoin futures market on hold, citing a need to review how it approaches the space.

"Bakkt was first announced in early August as a bitcoin trading and custody platform, but its launch has been repeatedly delayed It has submitted a proposal to the CFTC, asking for an exemption which would allow it to custody the bitcoin it uses to settle its futures contracts. While CFTC Commissioners were reportedly given the proposal in December, it now appears to be back before CFTC staffers. It is unclear if or when the proposal may be published for a mandatory 30-day public review period. Until the review period has ended - and CFTC Commissioners have voted to approve Bakkt's exemption - the exchange cannot launch its one-day physically-settled futures contract."

Bakkt may finally receive the approval for its BTC futures in the next 10 days. It all depends on whether the U. S. CFTC decides to not to disapprove the futures.

The U.S. CFTC has cleared LedgerX to offer physically settled bitcoin futures contracts. Unlike the cash-settled futures listed by the CME, when the contract expires, the buyer will receive bitcoin rather than the fiat equivalent.

In June, CME bitcoin futures set a new record for open interest amid a surge of new account sign-ups. More than 2,960 accounts have traded their bitcoin futures since launch, and more than 950 new accounts have created in 2019. In addition, the there are now 49 entities that hold contracts worth at least 25 BTC.

LedgerX admitted Thursday that it has not launched bitcoin futures, as the firm had previously claimed, after the U.S. Commodity Futures Trading Commission (CFTC) said it had not approved the exchange to do so.

Interest in Bitcoin futures trading continues to gain momentum. As a result, the Chicago Mercantile Exchange (CME) Group is reaching record numbers for its Bitcoin futures contracts trading.

The United States Commodities Futures Trading Commission (CFTC) has confirmed that LedgerX has not yet been approved by the agency to offer physically-settled Bitcoin futures, in a statement obtained by CoinDesk.

"The cryptocurrency has jumped about 14% over two days and was trading at $38,295 as of 11:05 a.m. in London on Thursday. While the momentum may cheer bulls, a JPMorgan Chase & Co. team said backwardation in a part of the futures market -- where the spot price is above futures prices -- is reason for caution."

The Chicago Mercantile Exchange (CME) Group launched micro Bitcoin futures at one-tenth the size of one Bitcoin. The original CME Bitcoin futures contract, launched in December 2017, is worth five Bitcoin. Micro contracts appeal to retail traders priced out by the original offering, and institutional users who wanted more wiggle room in their trading strategies.