One of the most well-liked and practical methods to impact cryptocurrencies is futures trading. It is a way of making price predictions for assets, like cryptocurrency, without keeping them. The future cost of a currency may be predicted by traders applying cryptocurrency futures, similar to commodity or stock futures. Bitcoin ones are now the most widely used kind of cryptocurrency contract. Futures trading in cryptocurrencies provides greater chances for portfolio expansion. With the help of the leverage offered when trading futures, it is simple to multiply a portfolio by many in a single transaction.
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Cryptocurrency futures: what is it, and how does it work
Futures contracts are a type of agreement to buy or sell a specific asset at a set future date for a fixed price. A futures contract’s asset might be anything, including products, services, and stocks.
You might not notice a difference between conventional trade and cryptocurrency futures. It is primarily because traders in both scenarios apply the appropriate management strategies while trading long and short.
But because futures contracts only deal with the cost movement of the product, they significantly differ from spot sell. They are far more supple and manageable without a physical asset. Additionally, they permit high-leverage trade.
A range of futures contracts kinds is accessible to market members. The settling and expiration periods utilized in the common futures market are included in ordinary futures contracts. Certain cryptocurrency exchanges, like WhiteBIT, offer conventional futures contracts. Most of them provide contracts and futures, which are transacted in USD. They are frequently calculated every three months. They are great for swing commerce.
Perpetual contracts are considered a different type that is widely used. Since they didn’t have an end date, they quickly rose in popularity and were accepted by significant cryptocurrency exchanges. The primary strategy for perpetual contracts is keeping contracts near the market costs. Depending on their available positions, traders compensate one another within particular intervals.
The gap between a perpetual and spot price determines who pays and gets. Therefore, users might use long positions when the rate is affirmative. When entering into a perpetual contract, the person doesn’t have to wait for a specific date and can hold the position as long as he likes. It is the primary pros of perpetual futures, which is why they are the most widespread among traders. Various assets, including equities, stock indexes, commodities, and cryptocurrencies, can be covered by futures contracts.
One of the main similarities between Bitcoin futures and other futures contracts is the ability to gamble on an increase or reduction in price in the future.
What are the pros of crypto futures trading
For a good reason, futures contracts for cryptocurrencies have soared in popularity. Here are a few advantages:
- Even novice traders may easily trade futures, unlike genuine cryptocurrency traders who need admittance to a liquid sale and an assured digital wallet.
- Greater possible profit. Profits are often broader when trading leveraged crypto futures.
- Adaptable trading tactics. With futures, numerous trading methods may be implemented considerably more effectively. Additionally, you may short bets using cryptocurrency futures without barriers.
Consequently, you have more chances to use different trading techniques and increase earnings.
Top 3 crypto platforms to dive into futures
Many exchanges offer trading in futures. All of them offer convenient trading conditions. It is essential to choose the right platform.
WhiteBIT is the best cryptocurrency exchange. Investing in a blockchain project with interest payments is an option besides active trading (staking) — the exchange deals in dozens of alternative currencies, including DASH, Litecoin, Ethereum, and Bitcoin.
- A straightforward and practical trading platform.
- A proper mobile application.
- Low fees for trading.
The platform’s pros incorporate basic trading for new users, spot and margin trading, peer-to-peer trading, a free multi-currency account, various depositing and withdrawing money options and a straightforward and profitable system for investing in blockchain projects.
The spot market is supported by the rapidly expanding cryptocurrency exchange FTX, which offers a wide range of unusual derivatives and instruments. Here, a wide range of goods is provided, such as margin trading tokens, Bitcoin volatility contracts, hash rate futures, and cryptocurrency stock market trading. FTX provides dozens of cryptocurrencies and tokens for futures trading and leverage for traders who don’t want to use derivatives. It also allows them to buy them on the spot sell.
Kraken is where you can buy and sell multiple cryptocurrencies and stablecoins, including Bitcoin, Ethereum, Tether, Cardano, and XRP. Futures and indices are other kinds of trading besides margin. The website provides an extensive knowledge library, guides, and video podcasts with news and stats.
Ultimately, by trading futures, you can discover many opportunities for yourself. It is natural if you choose the right platform as an assistant. WhiteBIT is ideal for this. WhiteBIT cryptocurrency futures let investors make predictions about the value of cryptocurrencies in the future. Utilizing the reputable WhiteBIT exchange to invest in futures offers extra options for portfolio expansion. Leverage is a simple way to grow a portfolio while trading futures. Hedging is another justification for trading futures. Moreover, when the business moves negatively, cryptocurrency futures might safeguard a portfolio and act as a hedging instrument.