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Author: Admin | 2025-04-28
Of prices in the future.To illustrate, let’s say you believe the price of Bitcoin (BTC) will rise by the end of the month. In this case, you might want to open a long position on Bitcoin by purchasing a Bitcoin futures contract with a monthly expiration date. Contrarily, if you anticipate a rise in Bitcoin’s value, you would place a long bet on the cryptocurrency. When the contract’s end date arrives, the two parties involved in the transaction finalize the terms of their agreement.Although it is required for a futures contract to have an end date, perpetual contracts are a type of cryptocurrency futures. The unique feature of perpetual contracts is that they never end. They function in the same way as regular futures but do not expire or settle.A perpetual contract’s price tracks the current value of a cryptocurrency and fluctuates very close to that value during trading. The funding rate, in which long and short traders make regular payments to each other based on the market situation, is the primary mechanism that allows for perpetual contracts to exist.Types of Crypto Futures ContractsCryptocurrency investors can choose from a number of different futures contracts. Be sure to choose the appropriate futures exchange, as most platforms do not offer all of the listed types.Standard Futures ContractsRegular cryptocurrency futures include expiration and settlement, just like any other futures contract on a traditional market. In December 2017, CME Group and CBOE, both based in Chicago, were the first futures trading exchanges to offer Bitcoin futures contracts. Until the BTC price broke its all-time high of $20,000 in 2020, this was one of many factors that drove the BTC price to a record high.As can be seen in its Bitcoin Futures Calendar, CME currently offers several Bitcoin futures with varying maturity dates. At the time of expiration, all contracts are settled in U.S. dollars. And while CBOE has temporarily shelved Bitcoin futures contracts, the exchange promises to reinstate the product as demand for cryptocurrencies grows.Yet, contrary to popular belief, some cryptocurrency markets do offer traditional futures contracts. Most of these exchanges, like BTCC, FTX, Deribit, and Binance, offer quarterly Bitcoin futures contracts that are typically traded in U.S. dollars. They are great for swing trading because they are typically settled every three months.Futures with Physical DeliveryFutures contracts for a specific amount of a cryptocurrency that are set to expire upon a certain date are not the only cryptocurrency futures contracts with an expiration. Bakkt, a company backed by New York Stock Exchange parent company Intercontinental Exchange (ICE), was the first to introduce them (NYSE). The only distinction between cryptocurrency futures and the aforementioned regular futures is that cryptocurrency is physically delivered at settlement.Bakkt now
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