Wednesday, July 17, 2024
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Cryptocurrency Options And Futures

Cryptocurrency is a digital currency that is traded online. Advancements in technology have made it possible to have a decentralised system practically owned by no one that enables the existence of crypto. Blockchain makes it hard to counterfeit the crypto because of the unique codes on each crypto. Two ways to trade cryptocurrency are options and futures. Let’s look at different types of crypto with futures and options.

Bitcoin is one of the very distinguished cryptos, v bitcoin futures are an excellent example of cryptocurrency futures. Bitcoin future performs a purpose same as a stock or any other commodity, allowing an investor to speculate the Bitcoin cost in the outlook. Due to the volatility of bitcoin, it is seen as a risky investment to capitalise in futures. Nevertheless, bitcoin Futures contain their pros to the investors:

  • Futures are advantageous to the investors in that, no matter the path the value of Bitcoin takes, they might have a chance to earn some money. Bitcoin futures are employed for long term or short-term income-earning investments. Bitcoin futures are also retailed on the Commodity futures trading commission (CFTC), a regulated body providing investors with some security and confidence to invest.
  • Unlike other forms of crypto deals, bitcoin futures don’t require a bitcoin wallet since there is no transfer of bitcoins. Bitcoin futures are settled by just cash. With crypto futures, it might be less risky since you don’t have to hold an unstable asset.

A crypto option involves the right given to an investor to buy or sell a crypto asset at a set price and time. It might, however, allow one to do the transaction before the specified time. The right to buy is known as the ‘Call’ option, while the right to sell an asset is known as the ‘Put’ option. With this understanding, options serve as contracts that, just like futures, allow you to infer the price of the crypto assets.

The difference between futures and options is that for options, you can not only pay in cash but also with other cryptocurrencies; hence might require you to have a crypto wallet for their transfer. Another difference between futures and options is that if a call buyer does not want to exercise the contract, then they are under no obligation to do so.

If the market goes against the call buyer, they are not at risk of losses. For crypto futures, when the price goes up, the one who assumes the prices will be going down will have to pay the balance to the one who thought the costs to go up and vice-versa.


Investing in crypto has immensely grown with options and futures due to their hedging nature; it has increased popularity on institutions and big investors. Crypto futures and options are ideal for a retail trade kind of business. Technology has allowed the creation of many online platforms that offer crypto options and futures like OKEx, CME and Intercontinental Exchange, to mention but a few. The venues have given investors a vast number of options to choose from and work and earn at the comfort of their location.

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