How To Invest In Bitcoin Exchange Futures

Bitcoin

It is a fact that Bitcoin has indeed gone mainstream and various exchanges, starting with CBOE, the CME group have started offering bitcoin futures. Incidentally, this has helped to transform Bitcoin into a viable investment option for depositors as various exchanges are currently offering Bitcoin futures. In fact, when it comes to the question of ‘how to invest money, Bitcoin futures are often considered as a safe bet compared to other forms, such as stocks, currencies or for that matter, commodities. With the CME group announcing Bitcoin futures contracts by December, 2017, Bitcoin has gotten a large boost, ever since the financial crisis of 2007-2009.

What is Bitcoin Exchange?

Early on, most of the shadow exchanges offered Bitcoin exchanges but the issue that most depositor faced was safety, security and of course, the legality of the whole operation. This assumes significance ever since raids were carried all over the world at several of these shadow exchange firms, but ever since the big financial crisis, Bitcoin has managed to gain a reputation of being a valuable investment option for many, all over the world with several legitimate exchanges enabling you to trade and/ or convert your bitcoin into other formats. The one main concern that most investors often have, when it comes to ‘how to invest money’ is ‘voltality’ but ever since some of the main derivative exchanges have started to offer investors bitcoin futures contract, bitcoin has become more transparent, with better liquidity and efficient pricing model, than earlier on.

A bitcoin exchange is similar in most aspects to a stock exchange; essentially you would be exchanging your fiat currency or bitcoins to carry out specific trades in the market. But not all exchanges enable you to trade bitcoins, while some do; other exchanges enable you to convert your currency into other crypto currencies. Each exchange differs from the other in some aspects so you may want to check out various exchanges before choosing one to trade with. Essentially, once you have selected a particular exchange, you would be either exchanging your bitcoins or trading the same, by matching the buy or sell orders; or if you were looking for a safe method to convert your bitcoins, then these exchanges are your safe bet.

In fact, some of the bigger exchanges offer you trading opportunities by trading in bitcoin and other cryptocurrencies. Due to the volatility that seems to be engrained into bitcoins, investors can now deposit their money in the form of USD with these exchanges, and take advantage of the current bitcoin pricing and make money in the process. Please remember that when you trade in bitcoin with exchanges, or for that matter, any currency, you would be required to maintain a margin maintenance where you would be required to maintain a certain amount as insurance against losses that you might occur during your trading sessions. Once your margin gets depleted, the exchange in question will issue you with a margin call which you would be required to meet, before you are allowed to operate your trading account.

Liquidity brokers:

Trading on margin is offered by a few exchanges where bitcoin is concerned; a trader may assume that the value of bitcoin may raise in the near future and is looking for ways to purchase, say 30 bitcoins but lacks the requisite funds. In such an event, he can borrow the same from peer reviewed liquidity brokers; liquidity brokers are essentially those who are willing to lend the requisite bitcoins to the trader; for example, if you are looking to borrow bitcoins from a liquidity provider, then at the end of the specified trade, you may be required to pay back 2OX bitcoins borrowed in USD and interest that may be levied. You would be required to reimburse the liquidity provider with the borrowed amount in USD + interest at the end of the specified trade and time period.

Futures: What Was Available Earlier

With most exchanges offering futures contracts for various currencies, as one of the best investment options, it was but a matter of time before the same exchanges stated offering bitcoin futures. That certainly seems to be the case now, with some of the top derivative exchanges offering bitcoin futures, and with investors having more trading opportunities as a result. If you are on the lookout for trading opportunities, then bitcoin (both spot and future) certainly offers you some of the best. But please note that most exchanges charge you a fee enabling you to carry out trading sessions on their platforms, so you may want to take this into account as well. But that said, if you are into online trading, then trading in crypto currencies, especially bitcoin seems to be more lucrative when compared to other forms of trading – from stock markets to commodities, and with good reason.