How To Trade Bitcoin Futures?

The crypto market offers loads of convenient instruments for successful trading and investing. One of the common tools you will find on all credible and legitimate crypto platforms is futures on Bitcoin. Since Bitcoin is the most popular crypto asset and has the most significant trade volume indicator and market capitalization, it is often used for futures trading.

How does crypto futures work? Similarly, as with any other valuable commodity whose price can be predicted and bet on, digital assets are widely used for this type of trading. The essence is in speculation on the future asset’s price. The process comes down to concluding a derivative contract, which includes:

  • the BTC futures price;
  • the date when the contract expires;
  • other conditions.

The most often-used strategy for BTC futures is “Long or short”. Let’s consider how it works.

Long Position

Suppose you carried out a tech analysis, which showed that the BTC price would grow in the future. So you conclude a derivative contract and open a long position. It means you will sell your holdings at a higher price if your forecast is correct, and the asset’s value will really increase by the day the contract expires.

Short Position

If your analysis shows that the BTC price will drop in the future, you sell your holdings and open a short position. Then, when the futures contract expires, and if the BTC rate really drops by that day, you repurchase assets. Thus, you still hold crypto and take a profit from selling your holdings at a higher rate.

You can practice Bitcoins futures trading on the WhiteBIT platform. It offers a convenient interface and the possibility to trade in a demo account. Thus, you can find all the pitfalls and details in your trading strategy and receive priceless experience in futures trading.