How does Crypto Futures Work?


Crypto trading is a chance for everyone to receive a profit by having just a small initial amount of money. Since crypto asset prices are volatile and may change many times a day, it opens many opportunities for traders to earn from those not significant price fluctuations. There are many popular trading strategies for crypto enthusiasts, as well as many working tools such as:

  • swaps;
  • spot markets;
  • p2p exchange;
  • futures;
  • margins;
  • etc.

What is Trading Crypto Futures?

The word “futures” is probably known to everyone. It is a kind of speculation or “betting” on the future price of an asset or any other valuable commodity. There are speculations on the grain price, gold, silver, oil, etc. Here we focus on the crypto field, so let’s talk about it in more detail.

Crypto futures are contracts made between two participants. One of them “bets” on the asset’s rate growth in the future, while another one believes it will drop on the contrary. The essence is – the one whose forecast will be true receives a profit. So it is possible to earn in a downward market. For example, the participant who believes that the asset price will drop receives a percentage if it really drops. The reward is calculated depending on how much the price changed and to what side (increased or fell).

Crypto futures contracts include the date when the parties must fulfill their agreements and the price for the asset, agreed upon beforehand. 

There are also futures contracts with no expiration date, called perpetual contracts. In such a case, a trader does not have to sell or buy assets on any exact date. The contract’s prices adhere to the spot market, and this is due to funding mechanisms on some crypto platforms. The essence is that futures contracts parties receive profit or pay one another depending on their positions in certain timeframes. That is participants payout each other depending on how the price behaves. 

Perpetual contracts are available on the WhiteBIT crypto exchange. You can trade crypto futures using 20X leverage on WhiteBIT.