Sunday, June 16, 2024

Investment in Bitcoin Futures: The Future of Crypto Trading

Bitcoin’s price surge is one for the record books: in 2010, 1 BTC cost less than USD 0.10. After a decade, the price of Bitcoin has risen to USD 50,000. Consider what would have happened if you had spent simply USD 1 on Bitcoin in 2010 — that dollar would now be worth over USD 500,000 and growing. Consider what would have happened if you had been able to buy Bitcoin with 100x leverage: that $1 would have been USD 50,000,000. Future trading has this kind of influence.

The Spot Market for Bitcoin

Bitcoin’s story is just getting started, so there’s still time to join in on the ground floor and benefit. You had to find a broker online or mine Bitcoins yourself if you wanted to buy them. It was still feasible to mine Bitcoin on a home computer back then. The first Bitcoin exchanges began trading in 2010, with “Bitcoin Market” launching in March and the infamous “Mt. Gox” launching in July. Any trade that settles promptly, such as on the stock market or selling gold for cash at your local jewelry store, is referred to as the spot market.

The spot market in the crypto realm consists of the following:

  • Interactions
  • OTC (Over-the-Counter) Brokers
  • Instant crypto-to-crypto exchanges
  • Swaps in Defi
  • ATMs that accept cryptocurrency
  • Peer-to-Peer (P2P) Trading is a type of peer-to-peer

What is the Futures market and how does it work?

Any transaction in which items are exchanged at some point in the future is referred to as a futures market. The spot market, on the other hand, refers to any transaction in which the exchange takes place instantly. Trading in futures is classified as a derivative. Derivatives are financial products whose price is determined by the price of another asset. A Bitcoin futures contract, for example, gets its price from the spot market price of Bitcoin. Today, Bitcoin is the digital asset with the highest investment. Many people use online trading platforms, read more to trade this cryptocurrency for profits.

What are the advantages of Bitcoin Futures for aggressive traders?

Active traders and institutional investors frequently prefer to work in the futures market. Futures markets are extremely liquid, making it simple to enter and exit trades. Bitcoin futures exchanges, for example, trade billions of dollars more in volume than Bitcoin spot markets. In comparison to the spot market, futures trading offers greater trading alternatives. Having the ability to trade on margin, for example, permits traders to get more market exposure. Many crypto futures markets allow for leverage of up to 100x, meaning that a trader can risk $100 for every $1 of margin.

The Influence of Leverage

Traders that trade on margin can gain additional market exposure for their money. Leverage on crypto trading platforms often ranges from 1x to 100x. Traders on the Drixx trading platform can utilize the leverage of up to 100 times. Aside from leverage, traders can stake a portion of their cash with Drixx and receive a 10% annual percentage yield. Even after staking cash with Drixx, traders can acquire extra market exposure due to leverage.

The Economic Benefits of Bitcoin Futures

Price volatility prompted the creation of the futures market in the traditional economy. Merchants and farmers sought a mechanism to protect themselves from price fluctuations by keeping their costs constant. Investors, speculators, and traders were attracted to this approach. The futures market is now an essential component of the financial system. The bitcoin ecosystem is still in its infancy and is rapidly expanding. The introduction of futures trading lets the industry mature by allowing more liquidity into the crypto ecosystem and providing institutional investors with a familiar onramp to begin trading these financial instruments.

Sam Allcock
Sam Allcock
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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