Is Crypto Futures Trading in Big Trouble After Some Time?
Futures trading in cryptocurrencies is as promising as the share market where you may trade daily in futures. The futures market is pretty volatile in the case of certain cryptocurrencies like Bitcoin where you need some strong heart to face the headwinds that may knock you off balance. The same holds for share futures also, but if you have very little money to stay invested in cryptocurrencies your best option is to go with futures trading where the brokers or exchanges allow you to take multifold leverage. While Bitcoin is the largest traded cryptocurrency in the world today, it still is pretty volatile and just as there are huge profits to mint, so also you may have to take in losses when the market is negative. Hence, crypto futures trading can give you moments of anxiety, unlike trading in pairs. It is also seen that pairing invites the largest volume of trade apart from security and liquidity. For instance, you can trade in the Bitcoin/Tether at BTCC and you can find the market is more stable. The reason is that Bitcoin is the largest cryptocurrency while the Tether or USDT is the largest stablecoin pegged to the US dollar.
From the above, it is easily understood that far from being in trouble in the future, options like pairing will remove the volatility of the crypto. Although there is still that element of risk you are better cushioned against any hard landings.
Evolving Cryptocurrency Futures Market
You will be much safer with the evolving crypto futures market than the share market when your shares may get redundant when the company in which you have invested your money closes down. It can never happen to cryptocurrency as it is a digital currency running on blockchain technology.
Of course, the value may go down or climb up yet the crypto greatly depends upon the validation of the miners through an incentive scheme and therefore is pretty foolproof. But during bitcoin trading, you may need to invest huge amounts as bitcoin value is not cheap. Since most people have little money to invest they can carry out bitcoin futures trading by getting maximum leverage from professional exchanges like the BTCC.
Pairing gives you more flexibility against the volatility of the market and you can convert USDT to fiat money when you sell your USDT on the exchange. It is very important to note that you must first know about the authenticity of the exchange as only a few brokers like the above can extend such a facility.
Later, you can convert the USDT to the US dollar or EURO as per your preference.
Margin Money for Futures Trading
You need to deposit margin money so that the crypto trading platform allows you to trade with their money. It also means borrowing money from the exchange to take leverage that may be sizeable so that you can try your luck at making money without actually possessing the crypto.
Futures are settled daily by your broker as you are playing with borrowed money. In this way, they get to know the margin requirement that you may require each day although the future settlement may be after a period.
