Crypto futures are the type of trading where the parties enter into a contract to buy/sell assets at a precise time and at a pre-agreed price. It requires skills to predict the future price of crypto, which means you should understand how the whole market works. Because volatility is high, there is both tremendous risk and tremendous opportunity to generate income and grow your investment portfolio.
If you want to start with that crypto futures, we recommend using popular crypto assets, e.g. e.g. Bitcoin. So let’s talk about BTC futures and the basics of futures trading as a whole.
Key components of futures on bitcoin
Here are the top things you should know about bitcoin futures:
- leverage. Futures trading includes the ability to use leverage. It can make your trading really efficient. When you buy BTC on the spot market, you pay for it at the current price. When it comes to futures, you don’t necessarily buy crypto – you open the position for a fraction of the BTC price and use leverage. It can be 20x, 30x or even 100x leverage.
- You can go long and short. Futures trading makes it possible to make money on both uptrends and downtrends in the market. “Long” means that you enter into a contract with the thought that the price will increase. “Short” means to be in a “bearish” trend when you are sure that the price will fall. So futures make it possible to make money even if the price falls.
- Liquidity. A high level of liquidity makes it possible to make money from future trading, and the Bitcoin market is the largest in terms of liquidity. Usually, a liquid market means less risk as there are always people looking to buy and sell crypto.
The WhiteBIT exchange offers a perpetual futures contract. That is, there is no expiration date to execute a contract. The price in such contracts stays close to spot prices, which is possible thanks to the funding mechanism on the exchange. Try futures trading on a demo account on the WhiteBIT platform.