In simple terms, bitcoin futuresallow investors to bet on the price of bitcoin without having to actually physically buy and store the digital currency. This greatly reduces one of the key risks of investing in digital currencies, namely, safe storage.
People also ask
What is a bitcoin futures contract?
A futures contract is an agreement that obligates a trader to buy or sell an asset at a specific time, quantity and price. Bitcoin futures help to bring in additional liquidity to the market and also provide opportunities for arbitrage. As the trading value of Bitcoin varies, so too will the value of different Bitcoin futures contracts.
How will the CBOE’s bitcoin futures work?
The CBOE’s futures contracts will be cash-settled, which means that no bitcoin will change hands. The final settlement value will be equal to the official auction price for bitcoin as determined by the Gemini Exchange, rounded to the nearest $0.01.
How to leverage bitcoin futures?
Another interesting way that investors can leverage a futures contract is via calculated speculation. For example, if the price of Bitcoin drops to $5,000 tomorrow, there is every chance that it may go up to $10,000 again in four months. In this case, the investors may hedge their bets with a futures contract. How do CME Bitcoin futures work?
What are crypto futures and how do they work?
How do crypto futures work? Futures are financial instruments that allow investors to buy or sell an asset like Bitcoin on a future date for a predetermined price. When the time comes, , regardless of the current market price.