What is Futures Trading in crypto?

What Is Futures Trading In Crypto?

Futures trading is buying or selling a standardized legal contract that obligates two parties to exchange an asset, like oil or stocks, at a predetermined price on a specific future date. Note the these two phrases ' predetermined price, and on a specific date ' (for future reference)

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🕒 6:49 PM

📅 Sep 07, 2025

✍️ By kihole

Some of the best reasons Futures Trading Happens is to lock in a price and protect against future price changes, for example, an airline hedging against rising fuel costs.
It Also serves as an investment tool, buying and selling futures contracts offers the advantages of price speculation and risk mitigation against potential market downturns.

However in Crypto, Crypto futures track the prices of cryptocurrencies, like Bitcoin, Ether, Solana, and XRP. Investors and traders use these contracts to speculate on future price movements of these coins while offering an efficient way to hedge in the crypto space.

For example, if Bitcoin is selling for $112,000, it will cost you $112,000 to purchase. With futures, you can often put up less than 5% of the overall value to control a larger position in cryptocurrency futures such as Micro Bitcoin futures.

So basically Cryptocurrency futures are contracts between two investors who "bet" on a cryptocurrency's future price, giving them exposure to cryptocurrencies without purchasing them. Crypto futures resemble standard futures contracts because they allow traders to bet on the price trajectory of an underlying asset.

To summ it up It's essentially a "bet" on an asset's future value, used by both buyers to hedge against price changes and sellers to secure a future sale at a known price. These contracts are derivatives, meaning their value comes from an underlying asset, and they are traded on exchanges.