Everything you need to Know About Bitcoin Futures
Cryptocurrencies have become an integral part and parcel of an investor’s life. There could be hardly any corner left that crypto has not touched and its presence can be experienced in the form of payment alternatives and other investment tools. With the growth in time, more advanced features have crept into the digital zone and these are leading way through the crowd. One of the features of cryptocurrency that is advanced in itself is none other than bitcoin futures. To know more about bitcoin trading you can follow this link.
The name itself marks something from the future and this has completely revolutionized the world of bitcoin and in the end the entire crypto chain. As the bitcoin market has gained quite a pace, the introduction of new technology is a must. In this article, we are going to discuss the features of a young technology named bitcoin futures and will try to clear your doubts regarding the same. So, let us start the journey!
Bitcoin futures- An introduction
Volatility is an integral part of a cryptocurrency price. The current and future price of a currency is completely dependent on this factor. Keeping this factor into consideration, the concept of cryptocurrency futures was invented. In technical terms, cryptocurrency futures can be considered as smart contracts between two parties usually called investors that make an assumption about bitcoin’s price in the future and bet on the same. The risk of buying and then testing price variation can be easily maintained through this and as a result the provision of gaining exposure without buying a specific cryptocurrency stands. The platform used by such crypto futures to trade on is the Chicago Mercantile Exchange and other cryptocurrency exchanges.
The very first contract including bitcoin future was launched in December 2017 but due to some reason, it was discontinued. The first launches show settlements in the form of cash and the platforms used Bitcoin reference rates and ether reference rates.
Understanding Bitcoin futures
In general terms, cryptocurrency futures can be considered as derivative of their parent crypto. So, bitcoin’s future will be completely derivative of bitcoin and these are referred to as contracts. The parties involved are commodities investors and both make terms and regulations speculating about the future prices of bitcoin. They settle their deal by deciding a specific point of time and date shortly. The platforms have already devised a set of protocols that one investor should follow to be in the race for the future. The order value of units, their pricing, and other related marginal requirements are pre-set and the parties involved should meet these conditions.
The activity of trade related to bitcoin’s future trade
Since its launch in 2017, bitcoin futures have seen a sharp rise in their transaction rates and volume of transactions. According to different studies, on average 18,000 bitcoin-related future contracts were exchanged every day, and following the next years, the numbers were higher. The trading volume that is considered the promising future of a bitcoin futures contract can be seen as very high in these studies and thus the results can be high and more promising.
Advantages of buying bitcoin contracts
- The foremost benefit of buying and investing in bitcoin futures contracts is the availability of funds. One can easily store their funds without settling for quick decisions.
- The profits can be analyzed and then the speculations can be made without haste.
- Everything around the investor is in his control. If he thinks he should go for the deal, he will make it.
- The concerns of security are nil in this type of futures contracts.
- Prices can be analyzed and decisions can be made accordingly.