Futures are an agreement to sell or buy an asset at a certain price in a future date.
From the moment the futures contract is concluded, the two parties involved in the contract must purchase the asset at the agreed upon price, regardless of the market price at the time the contract is applied.
The purpose here is not to increase profit as much as possible. These agreements are made to protect the variable price of an asset that is bought and sold on a regular basis in the finance market.
Futures are also used in the portfolio to offset the changes in investment that are particularly supportive.
It occurs in the futures market, which acts as a means of trade and bargaining for these contracts.
Are they working well?
There are two positions in futures contracts: long and short.
If you take a long position, you are willing to buy a certain fiyata at a future date. When you take a short position, you are willing to sell the asset at a certain price in the future.
To illustrate this, let's imagine that an airline company that wants to protect itself from the rising amounts of fuel costs brings a futures contract.
Suppose that the selling price per liter of fuel is 2 ₺. The airline company believes that this price will rise and is buying a three-month futures contract for 1,000 liters at the current price. So the value of the contract is 2,000..
The airline made a three-month contract. If, after three months, the contract is over, the price of one liter of fuel will be 3 hava and the airline will have won 1,000..
The supplier will enter into a futures contract with peace of mind to provide a stable fuel market even when prices are high. If the fuel price drops unexpectedly, the same contract will protect itself.
it means that in this case both the buyer and the seller in the contract are protecting themselves from the variable fuel prices.
There are also investors who use futures contracts as a means of speculation, not as a mechanism of protection.
These investors intentionally take long positions when the price of a product is low. As prices rise, the value of the contract grows and the investor can sell the contract at a higher price than another investor at the end of the contract.
What is Bitcoin Futures?
We gave the example of aircraft fuel above, but there is no rule that futures will be made on physiological assets. These transactions can also be made for financial assets.
The contracts for the Bitcoin futures will be based on the price of Bitcoin, and those involved can "bet" if they believe the future price of Bitcoin will be.
In addition, thanks to Bitcoin futures you do not want to buy Bitcoin, but the following people will be happy because you can be involved in Bitcoin futures without having Bitcoin directly.
This has two important implications.
Although Bitcoin is still not legally regulated, Bitcoin futures are traded in legally regulated markets. This is good news for investors who do not feel safe because the sector is not regulated as competently in the legal context.
Second, investors in countries where bitcoin trade is prohibited may still bet on the price of Bitcoin with the help of futures.
How do they work?
Bitcoin futures will work in the same way as futures for all other financial assets.
By assuming that the price of bitcoin will rise or fall, people will be able to take a long or short position from the Bitcoin futures contract.
For example, someone (assumes) holds a Bitcoin with a price of $ 18,000 and believes that the price will decrease in the future. This person can sell a Bitcoin futures contract from the current price of $ 18,000 to protect himself.
The price of Bitcoin and, indirectly, the price of the Bitcoin futures contract will decrease when the payment is due. The investor now also decides to repurchase the Bitcoin futures.
If the contract is close to the future payment, the investor will make a profit of $ 2 thousand if it is on sale from $ 16 thousand. So by selling high and buying low, it will protect your investment.
This given example is only a pretty example that Bitcoin futures will work well. If you look at the stock market where the transactions are made, the conditions within each contractor can change and they can have maximum-minimum price limits.
Bitcoin Futures What does it mean for the price of Bitcoin?
Looking at the short term, these transactions affect the price of Bitcoin in the positive direction because the interest in the crypto money market is increasing.
For the first time, a large and regular stock exchange has promoted Bitcoin price by nearly 10% to $ 16,936 in the day following the launch of the Bitcoin futures by the Chicago Board Options Exchange (CBOE).
Likewise, the world's largest stock exchange CME Bitcoin futures transactions with the beginning Bitcoin price of $ 20 thousand exceeded the limit.
Although it is difficult to predict whether Bitcoin futures will affect the Bitcoin price well in the long run, it is very likely that it will still be effective on the positive side.
Will the price increase with great probability?
There are a few reasons why Bitcoin futures could have a positive impact on the long term at Bitcoin.
As Bitcoin futures are legally regulated and take place in stock markets that appeal to wider masses, investors who have previously skeptical of the crypto money market can safely invest.
Institutional investors are highly likely to recommend Bitcoin futures as a safe investment option for their customers.
It increases the liquidity in the market, making it easier to buy, sell and trade crypto money.
Bitcoin makes Bitcoin trade possible, including countries where trade is prohibited, to a wider investor base.
Futures can also make Bitcoin's own price less variable as they are designed to offset changes in the price of an asset that supports a contract.
What Does Blockchain Sector Mean?
There are several different locations where Bitcoin futures can affect the blockchain industry.
Bitkoin comes directly to mind when crypto money is called. Even so many people know what Bitcoin does, even if they do not know what crypto money is doing. In this case, if the price of Bitcoin increases significantly due to Bitcoin futures or something else in a short time, more people will be interested in this sector.
As more people begin to become interested in the crypto money industry, subcoons will rise and push the price upwards.
However, this situation is also likely to develop differently. In the event of a serious increase in the price of bitcoin, investors can sell their subcoins to get Bitcoin. A major outflow from subconsins can also lead to serious reductions in subconscious amounts.
The more likely scenario is Ethereum, Litecoin, Ripple and so on. Such powerful subcons are likely to become futures products from Bitcoin's footprint. Of course, investors must have a very high demand for it.
Bitcoin Futures Trading Where To Do?
There are two separate markets for Bitcoin futures trading.
The first option is the crypto money exchanges designated as BitMEX and OKCoin. Crypto money exchanges have already offered this option, but Bitcoin futures trading on these stock exchanges is not legally regulated.
the other option is the regulated stock exchange. Bitcoin futures trading in regulated stock markets is still a new case, but the December price of Bitcoin was very influential.
Regulated traders began trading on the CBOE on December 10, allowing Bitcoin futures. Behind the CBOE came CME, which was added to the market on December 17, and commenced trading on December 18. TD Ameritrade and JP Morgan have announced plans to provide access to these markets.