Category: Investment

How to Invest in Bitcoin Futures?

Have you wondered why people are taking an interest in Bitcoin Futures? The truth is Bitcoin Futures are letting investors get more exposure to Bitcoins even when they do not own the cryptocurrency. It is similar to a futures contract that is normally associated with a stock. Using Bitcoin Futures as an investor you can speculate on future Bitcoin prices.

To buy Bitcoin Futures, you will need to get an exchange. You will then be expected to select the Bitcoin Futures that, to you, is the most acceptable. While the process seems to be quite simple on paper, there are some subtle details involved. The advantage here is that as an investor you do not need to own Bitcoins. You can simply pay an exchange or broker in the approved currency. This will never affect the Bitcoin’s future performance.

So, the main idea behind Bitcoin Futures is to make a calculated and informed guess about future Bitcoin prices. This price may be for the week to come or even for the year to come. So, any time-period n the future may be viewed as a date for buying Bitcoin Futures.  It is usually those who have been trading in Bitcoins who will be keen to purchase Bitcoin Futures. This is because to make sure profits, it is necessary to understand how the market works, and no one knows the market better than the traders. Another kind of person keen to purchase Bitcoin Futures will be a speculator. He is someone who has witnessed the Bitcoin’s meteoric rise and also owns some reserve cash that can invest in the market.

Bitcoins had earlier been traded on exchanges that were privately-owned and these were mostly unregulated. But things have changed today and Bitcoins are being traded as a commodity on some of the biggest exchanges. As the proverbial “big fish” make a rush for the Bitcoins, the cryptocurrency is getting more attention. The fast adoption of Bitcoins had proved to be a blessing for those who have benefitted from the bull market. The only challenge to becoming a holder of Bitcoin Futures is getting a broker. You can also check bitcoin up test reviews, if you need information about the techniques of trading bitcoins.

Why is trading Bitcoin Futures more beneficial than Bitcoins?

  • One of the biggest reasons why trading Bitcoin Futures is profitable is that the contracts are all traded on exchanges which are under regulations by the Commodity Futures Trading Commission. This is sure to give investors the much-needed confidence to take part in such trading.
  • Since Bitcoin Futures will be settled in cash, you do not need a Bitcoin wallet. There is no physical exchange of BTC during the transactions.

The only probable cause of concern for traders and investors has been the volatility of prices. For instance, the infamous Mt. Gox hacking incident and Bitcoin’s image of an outlaw by most governments have been responsible for the uncertainty. Although volatility of prices appears to be a cause for concern for some traders, the dramatic price swings can turn out to be excellent trade opportunities for some others. Investors will make use of these ups and downs to buy and sell their crypto coins through reputed exchanges like Coinbase.