At present, after the innovation of the crypto assets like Bitcoin, the market continues to go up very fast. It has many features for the marketers. But in this article, we are going to discuss the new feature of the cryptocurrency named Bitcoin Futures.
So, let’s first describe what are bitcoin futures, anyway?
Like other trading methods, it can also be used for the futures. It is a process of buying and selling a physical or non-physical product between two traders on a certain future time at a fixed price.
In this regard, it is seen that after the expiration of the time, between two traders, one may gain and at the same time, others may not. We can put an example to make you clearer.
Say you want to buy a huge amount of construction materials with the present price rate. It may be $20000 (hypothetically). In this case, you can make a deal with the buyer at the same price, but you are not willing to receive the materials now.
Maybe, you will use the materials after 6 (six) month. But you have paid all the money now. What if after six months the price of the construction materials goes high or low.
If their price goes high and says it will be $25000, you will save an extra $5000. And if it does not happen as we think and the price goes low. Say the price goes low and it will be $15000, then you will lose $5000.
The same concept can be used for the understanding of the future of bitcoin.
Futures market of Bitcoin gives the opportunity to the traders and investors to accustom to take risk both by selling and buying the physical commodities and futures of the contracts at a fixed later time or a fixed date.
But before making a contract between the investor and trader, you have to look closely at whether you should make the deal or cancel. You should have foreseen the result of the present marketplace. If you see, there is a big chance to go the price of Bitcoin up; there is a huge chance for you to involve in this futures of Bitcoin contract. At the end of the contract after a certain period, you may get benefitted for your experience otherwise you may lose here. So, be careful before the contract.
Make sure; you are going to trade on the standardized exchanges like CBOE or CME because they are the key aspects before making any contract of the future of Bitcoin. A well-regulated derivative helps investors to make their deal in the form of digital cryptocurrency like Bitcoin.
Some companies like Goldman Sachs declared that they have a plan to and already started to work to make it clear to their investors about the Bitcoin futures which is more important to them and their investors.
The high demand for Bitcoin futures seems to go further with a great pace because of the sign of its futures for the investors towards the crypto assets. It is the way to make it more popular and helps other people to get involved in the trade for its near futures as it is growing fast.
Futures of Bitcoin
In the case of bitcoin, the contract may be made depending on the present price of bitcoin and speculators may put a bet on the assumption of their expecting future bitcoin price at a fixed date.
This bet can be done in two ways- short and long. In the short term, the prices of bitcoin may go up suddenly whether, in the long term, it may drop after a certain period off before the anticipating date of the contract to end.
Two major Situations of the futures of bitcoin
There are two significant consequences of bitcoin’s futures. Bitcoins may not remain consistent, and it may keep unregulated. In this case, bitcoin futures may be utilized on regulated interactions. If there is any risk related to the business, it is good for those to make it concern because of the industries regulations.
The second one is, sometimes it happens to ban in a certain area of trading. If so, Bitcoin futures are ready to help the investors to speculate its prices.
Trade of Bitcoin Futures
You have two marketplaces to trade your Bitcoin futures out there.
BitMEX and OKCoin are the two popular cryptocurrency exchanges through which you can trade your own. But the regulation of Bitcoin is not largely regulated here.
There are second options as well in the market for you, and you can take its advantages for the growth of your business simultaneously. Here is the publicly regulation method too. But it is the most recent invention of the market. And in December its price goes up.