we talk a lot about the future when it comes to bitcoin futures as a financial instrument however are relatively new in crypto futures are contracts to buy or sell an asset at a predetermined price on a specific date in the future .
they’re generally considered a risk management tool companies can hedge against risks associated with the price movements of resources that affect their business.
for example : a shipping company like murst can buy futures that bet on the price of oil being higher by a certain date this means if they have to pay more for oil for their ships and their costs are impacted they don’t take as much of a hit since they’ve hedged it with their futures contract now the way that this applies to crypto is similar .
if you think the price of bitcoin will be higher or lower over a period of time then you can speculate with the bitcoin futures contract companies like back and cme offer these contracts with bitcoin futures you don’t directly buy or sell any bitcoin and you don’t hold it yourself.
what happens is these futures trading platforms hold them in custody some platforms even offer cash settled bitcoin futures the popularity of such products provides more options to institutional investors and traders and further cements their role in mainstream markets.
but do futures affect the price of bitcoin well they can certainly affect sentiment around the future price and potentially affect orders.
therefore affecting the price if futures contracts are being settled in bitcoin rather than feared this could also have an effect on the price got more questions don’t be scared to let us know in the comments there are no bad questions just make sure they’re about crypto .