What Are Bitcoin Futures | Beginner’s Guide To Understanding Bitcoin Future

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What Are Bitcoin Futures | Beginner’s Guide To Understanding Bitcoin Future

Wed Jun 06, 2018 12:58 pm

Futures are valid agreements to buy and sell an asset or a fixed amount of cryptocurrency at a specific price, on an exact date in the future. A futures contract allows a buyer and a seller to settle a transaction at a particular time in the future, for a specific amount.

In simple terms, once a Bitcoin futures contract has been created, both parties involved are required to go forward with the transaction (to buy or to sell Bitcoin) at the previously agreed-upon price, disregarding the current market price altogether.

Bitcoin futures work on identical principles as futures of traditional financial assets. Bitcoin futures are, in essence, a sort of risk management tools used in financial markets to balance out price fluctuations and the resulting volatility. There are two primary positions on any Bitcoin futures contract, namely the “long” position and the “short” position.


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