Cryptocurrencies are digital assets that have no physical form; however they are widely used for investment, trading, payment transfers and other purposes. Crypto trading is one of the most common way to use digital assets with the purpose of making money. Due to the increased volatility of crypto assets, traders generate income by buying and selling them at different prices. One of the most complex ways to generate income using digital assets is crypto futures trading.
The Essence of Futures
As a financial instrument, futures have existed for a hundred years. Thai financial instrument is used for commodities, precious metals, oil, etc. The idea is to predict the future price of a commodity correctly and conclude a contract where the price is fixed.
Crypto futures work the same way as the traditional market. An example:
- A trader thinks that the crypto asset will gain value, so one buys a futures contract on selling his assets on some exact day in the future at a higher price.
- A trader estimates that the price will drop, so one sells out his coins and concludes a contract on buying coins on an exact day in the future and at a fixed price (lower price).
In both options, the crucial thing is to predict the future asset rate correctly.
The Best Crypto Futures Exchanges
Here are the best-recommended exchanges enabling futures derivatives contracts:
- Finance futures
- FTX
- OKX
- KuCoin
- WhiteBIT
We recommend starting with the WhiteBIT platform, which is user-friendly and convenient for a beginner trader. The platform offers Bitcoin futures and many other popular crypto assets for their type of trading. It is advisable to use the most liquid and less volatile digital coins for futures derivatives because the more credible and stable the asset, the less risk you take. That is the reason why Bitcoin futures are the most common option – Bitcoin is always in demand. You can practice futures trading on the WhiteBIT demo account.