What are Futures in Crypto?


 With the cryptocurrency market's rapid development, many new trading and investment platforms are emerging. The largest and most trusted of them are Binance, FTX, Huobi, WhiteBIT, Coinbase and others. Besides elementary options such as buy crypto, sell it, swap, they offer a wide range of functions, for example:

  • staking;

  • futures trading;

  • margin;

  • leverage;

  • etc.

Crypto futures trading is one of the most complex financial instruments, and it refers to both traditional markets and markets of digital assets. In a traditional economy, futures contracts are used for gas, oil, gold, grains, and other commodities. In a digital economy, futures are used for trading crypto.

Understanding Crypto Futures

To put it shortly, futures are contracts where two parties “bet” on the future asset’s rate. There can be a “long” and “short” position, where “long” means a trader believes the asset’s value will increase over time and aims to sell his holdings, making a profit from the price changes. A “short” stands for a supposedly dropping market, where a trader sells his holdings beforehand and opens a futures contract on buying coins in the future at a low price. 

Obviously, this trading technique demands deep theoretical knowledge of how the market works and the ability to analyze the future asset’s value based on technical, fundamental and quantitative research. In addition to theoretical knowledge, successful futures trading requires a lot of practice.

Where To Practice crypto futures trading?

A crypto exchange WhiteBIT is a young platform that has already earned the trust of millions of users worldwide. The exchange is easy to handle, so even a novice user will cope with it. On WhiteBIT, you can register a demo account and try yourself in crypto futures trading. It implies using different leverage (borrowed funds to multiply your initial investments), so by practicing demo trading, you can see all the benefits and pitfalls of leverages of different sizes available on WhiteBIT.


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