The cryptocurrency futures market is growing and becoming more and more popular. There are many crypto futures brokers that offer a wide range of trading options and leverage to assist clients.
These types of exchanges typically profit from transaction rates or fees, depending on the type of instrument traded. And of course, when you trade any financial product, including futures, you are at risk, as most financial products use leverage and the range of The private electricity money market is extremely strong.
Let’s take a deeper look at crypto futures and how to profit from Bitcoin futures trading in 2021.
What is a futures contract?
A futures contract is a financial contract that holds the Buy and Sells parties – an agreement to buy and sell the underlying asset at a certain time at a predetermined price. In the future, the buyer is obliged to buy the underlying market and the seller is obliged to sell on the date of the contract or before the contract expires.
What is Bitcoin futures?
Like a stock or commodity futures contract, a Bitcoin futures contract is an agreement to buy or sell Bitcoin on a specific date in the future at a specific current price – without actually having to own it. Bitcoin. When a futures contract is entered into, both parties must buy and sell at the agreed price, irrespective of the actual market price at the contract performance date.
How Bitcoin futures work
When participating in BTC futures contracts, investors can choose either a long or short position
- Long BTC: A long position means that you agree to buy BTC in the future at a specific price when the contract expires.
- Short BTC: A short position means accepting to sell BTC at a fixed price at the expiration of the contract.
Benefits of Bitcoin Futures
- Bitcoin futures are used for the purpose of making a profit when speculating about the price movement of this cryptocurrency.
- Investors also use futures contracts to hedge the risk of price fluctuations, which is especially useful when the price of an underlying asset is highly volatile.
- While Bitcoin itself remains unregulated, Bitcoin futures can be traded on licensed exchanges.
- In regions where Bitcoin trading is prohibited, Bitcoin futures allow investors to still speculate on Bitcoin prices.
Why trade Bitcoin futures
Futures are a derivative product that assists investors in hedging down price risks by holding a short futures contract position simultaneously, allowing investors to minimize losses. No need for additional capital. Traders can also enter positions with little capital and aim for greater profits using leverage.
Negative balance protection is a unique feature of the futures trading BTCC exchanges offer. Whereas most other futures cryptocurrency exchanges often ask users to share losses when their account balances fall below zero. Since 2019, BTCC has promised that they will pay. 100% of a user’s negative balance instead of letting all profitable users share the loss.
BTCC exchange has perpetual, weekly and daily futures contracts for Bitcoin and Ethereum, trading leverage ranging from 10x to 150x is very handy to choose from for any investment purpose. For example, perpetual futures contracts do not have an expiration date and this type of contract is suitable for traders who want to hold a trading position for a long time. Although daily contracts at BTCC support maximum leverage up to 150 times, it is designed for traders looking for great profits in a short period of time.
BTCC is a 9-year-old crypto exchange and now provides crypto futures trading and the total trading reached 98 billion USDT contracts in the last 30 days, especially in the South Korea’s Crypto futures Market (비트코인 선물)!
How to make a profit when trading Futures
Cryptocurrency futures trading is a form of investment that offers portfolio diversification and helps you manage risk.
You can make money trading futures if you follow trends, manage your capital, and trade well. Some tips to make money with Futures you can refer to:
Select cross margin trade
Cross-margin uses the full amount of the margin as collateral for every transaction, shifting the balance to whatever is most demanded. This is the best strategy for almost every trader. With cross-margin trading, your positions will not be easily liquidated even during highly volatile market times.
Start trading with small capital
Start with a small volume and have good control over your margin. Let’s say that if you have 10 Bitcoins in your account, you should not invest it all in a single position. Instead, you can place 1 BTC to open the trade at first. If the market goes against your prediction, you can either replenish your open position or distribute it in the opposite direction to prevent losses.
Support & Resistance
Support is where Bitcoin’s price is hard to break, while Resistance is the highest price Bitcoin may not have risen above for a while. Simply put, when the Bitcoin price is close to the support in an uptrend, you can place a BUY order. If it is near the resistance during the downtrend, you can choose SELL.
There are many exchanges that offer Bitcoin futures trading in the market. BTCC is a trusted and professional exchange, offering 150x leveraged BTC, XRP, ETH, LTC, and EOS perpetual contracts. Cryptocurrency traders can use the leverage to increase their exposure to price movements and turn what could be small profits from spot trading into extraordinary returns.
With the growing recognition of the value of Bitcoin and the potential benefit of futures contracts. It’s no surprise that Bitcoin futures are a huge hit. It is very important to choose an exchange that not only has a stable and secure history but also offers flexible and user-friendly trading products.
In the above article, we have explored the concept and potential of Bitcoin futures contracts? This is a relatively new concept, hopefully, the article is useful for readers. Good luck.