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What is Futures Trading Crypto?

Futures is a financial instrument that allows one to speculate on the price of a commodity and make a profit based on a forecast. The success of futures trading lies in a trader’s ability to properly analyze the market and its future prospects based on the indicators from the past. Futures are often used for trading precious metals, grains, oil, and other valuable goods. Crypto assets are not an exception, and they are actively used in futures trading.

What are Futures in Crypto? 

Crypto futures trading is a popular financial tool allowed on many large crypto exchanges. It is also one of the most complex and risky earning tools advanced users successfully apply in their trading strategies. The essence is to analyze the technical part of the asset and understand what affects its price and what can make it drop. Also, the research includes external factors that can also impact the asset’s rate; and quantitive analysis that helps draw a conclusion from both previous types of analysis.

Once the research is over, a trader predicts the future price for the crypto asset: it will either drop or rise. Depending on the forecast, one picks:

  • to enter a short position (meaning a trader sells his crypto coins and then buys them back at a lower price in the future);
  • or to enter a long position (meaning the trader owes to sell his digital coins at a higher price in the future).

The day and price are fixed in a futures derivative contract. Thus, crypto futures trading is a method to make a profit even on a downtrend.

Where Can I Trade Crypto Futures?

There are large and respectable crypto exchanges supporting futures derivatives - WhiteBIT, FTX, Binance Futures, and Bybit. All of them belong to a centralized type and provide the highest level of safety for clients and their funds. Pay attention to the conditions each of them provides for futures trading. The leverage (borrowed funds) can vary from platform to platform.  To learn more about how to trade crypto futures, welcome to the WhiteBIT crypto blog, where you will find helpful guides and instructions on trading.

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