What is Crypto Futures?


Futures is a popular financial instrument advanced traders use in the traditional market. Futures contracts are agreements for the future value of an underlying commodity. It may be grain, precious metals, gas, etc.

As the crypto market is evolving, crypto futures have also become very popular among traders, but the underlying asset is not gas or oil, but crypto coins. Due to the high volatility of the market of digital assets, traders can make a fortune on crypto futures. Let’s find out how to trade crypto futures on the WhiteBIT exchange.

Crypto Futures Trading

The same as with traditional commodities, futures are all about predicting the future value of an asset. Two parties conclude an agreement on purchasing crypto assets or selling them on some exact day in the future. The date and the price are fixed in the document.

There are two options:

  • a trader might forecast the asset’s value increase, so one “bets” on it and owes to sell assets when the day comes;
  • a trader estimated that the asset’s value would drop, so one sells his assets beforehand and then re-purchases them at a lower rate when the day comes.

Thus, crypto futures allow making money even on the downward market.

The WhiteBIT exchange offers perpetual contracts on futures trading. They don’t imply any exact date when the contract must be fulfilled. Assets’ value, in this case, adheres to the spot market level. It is possible due to the exchange’s funding mechanism developed specifically for futures trading. So, depending on traders’ positions and the market fluctuations, they receive or pay out some fees according to the contract.

One of the main advantages of crypto futures on WhiteBIT is much lower transaction fees compared with commissions on the spot market. The platform allows using leverage – borrowing funds with the purpose of entering the trade with a larger amount. The maximum leverage on the WhiteBIT platform is 20. On the WhiteBIT demo account, you can practice different sizes of leverage and see how it works.

Amenorhu kwaku
Amenorhu Kwaku

Amenorhu kwaku is an author, internet marketer and entrepreneur. He is the founder of SuccessValley, a network community for students and aspiring entrepreneurs