What are Bitcoin futures?
A BTC futures contract is an agreement between a buyer and seller to buy and sell BTC at an agreed price at a future date. The agreement (contract) is the traded commodity, not the actual underlying asset (Bitcoin). It gives investors exposure to BTC without having to hold actual cryptocurrency.
In the case of Bitcoin futures, you are signing a contract that speculates on the price of Bitcoin at a certain point in the future, whether it will go up or down. You do not actually own any Bitcoin, rather it remains in the custody of the futures trading platforms like CME and Bakkt. You do not directly buy and sell Bitcoin on cryptocurrency exchanges and store it in your own wallet.
Futures are often seen as a risk management tool. You are essentially making a bet on the price of the asset over a specified period. This allows companies to hedge against risks associated with the price of an asset that could impact a certain area of their business. For example, a shipping company will bet on the price of oil going up at a certain date. That way, if the price of oil does go up and their costs are impacted, they can claw some of the money back.