Cryptocurrencies like Bitcoin and Ethereum or XRP grow more prevalent in mainstream media, newcomers find their way to exchanges. Spot trading welcomes those who are risk-averse to buy digital assets and hold them for an extended period while futures trading attracts users who are interested in further capitalizing on market movements.
Futures trading has become very popular and for excellent reasons. Here are some advantages of crypto futures that you should consider:
Trading futures is easy even for beginners than trading actual cryptocurrencies, which requires you to access a liquid market and have a secure digital wallet. In fact, therefore the trading volume in crypto futures is two to three times larger than spot trading volumes.
Higher Potential Profits
When trading crypto futures with leverage, the gains are typically more substantial. On BitMart Futures, you can set the leverage up to 100x, meaning that you can enter a position worth $1,000 with only $10 as capital. However, you should know that the risks of loss are also higher when using leverage.
Flexible Trading Strategies
The implementation of trading strategies works much better with crypto futures than trading actual cryptocurrencies, especially when it comes to intra-day trading. Also, crypto futures allow you to go short without any blockers. Hence, there are more rooms for you to deploy different trading strategies to maximize profits.
No Funding Rate
One important difference between futures compared to perpetual futures is that futures do not have a funding rate, and prices are often in contango, meaning future prices are higher than the current spot prices. This creates an opportunity known as cash and carry arbitrage, which is a market-neutral strategy that combines a long position in the spot market and a short position in futures. On the day of the settlement the futures price converges with the spot market price, generating relatively riskless returns regardless of the market condition or volatility.
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Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk. BitMart will do its best to list only high-quality coins, but will not be responsible for your investment losses.