Futures are a type of derivative contract that obligate two parties to exchange an asset—or a cash equivalent—at a predetermined price on a future date. When investors buy and sell Bitcoin futures contracts, they are speculating about BTC’s future price.
Can a new bitcoin futures contract exchange-traded fund (ETF) start trading?
The world of bitcoin – and by extension, the world of cryptocurrency – has been given a lift by the US Securities and Exchange Commission (SEC) recently giving its seal of approval to allow a new bitcoin futures contract exchange-traded fund (ETF) to start trading.
Why do bitcoin futures traders use leverage?
Because each Bitcoin futures contract represents 5 BTC, there is inherent leverage in the Bitcoin futures market. Bitcoin futures traders often use that leverage to speculate on short-term swings in the market in an attempt to generate large returns on relatively small upfront investments.
How to gain exposure to cryptocurrency futures?
You can also gain exposure to cryptocurrency futures by trading cryptocurrency ETFs. There are several Bitcoin ETFs that are linked to Bitcoin futures. The main advantage of trading Bitcoin futures contracts is that they offer regulated exposure to cryptocurrencies.
