Currently, Ethereum features trading has picked up steam as the second-largest cryptocurrency by market cap has seen bullish sentiments return since 2018.
In contrast to bitcoin, Ethereum is an open-source, decentralized applications (DApps) platform that powers a wide range of ecosystem applications such as e-commerce, payment systems, and smart contract implementations.
With its launch in 2015, ethereum has become one of the world’s most prominent blockchains and has become one of the most popular cryptocurrencies.
The crypto ecosystem is evolving, and so is the way in which crypto assets are traded. One of the most popular methods of trading cryptocurrencies in 2020 is through the use of futures contracts.
In the beginning, most ETH Exchangex offered only Bitcoin futures as the only crypto futures trading option, however, more and more platforms are embracing ethereum futures trading options as they become available.
Ethereum futures have seen a spike in volume according to a report filed by industry leader, The Block Crypto. Even though, bitcoin futures trading continues to dominate with three times the volume of ethereum futures. The second-largest cryptocurrency is catching up.
The BBTC platform allows users to trade ethereum futures, which are derivatives that trade on the price direction of a cryptocurrency using collateral. Futures trading is a form of speculation on the direction of the price of a cryptocurrency without the need to own the cryptocurrency themselves.
When trading ethereum futures, a trader may take long or short positions. Short positions reward the trader if he correctly predicts a fall in ethereum’s price. On the other hand, long positions reward the trader when ethereum’s value rises.
Furthermore, the BBTC platform allows you to trade Ethereum futures up to 50x leverage. This means that traders are able to borrow funds from BBTC in order to trade ethereum futures. For example, if you trade on a platform like AAX with 1:50 (50x) leverage, you will only pay 1% of your position.
Bitcoin Futures and Ethereum Futures
As a cryptocurrency, Bitcoin was created to provide a way for people to transfer value anonymously without the use of a central bank. Ethereum, on the other hand, was developed as a general-purpose blockchain with smart contracts that are capable of executing an infinite number of different functions. In this way, Ethereum is not only a great store of value but is also capable of doing many other things well.
In spite of the fact that Ether can be used as a digital currency as well, it was not originally planned to serve that purpose. Ethereum was instead designed with the primary function of monetizing decentralized applications and the smart contracts that run on it.
There are over $900 billion in Bitcoin’s market capitalization in September 2021. Ether’s market capitalization is roughly half that amount, at around $350 billion.
In terms of volatility, Ethereum is such a versatile platform that it does have a lot going for it, which makes it a great investment for futures traders. In other words, Ethereum futures are financial instruments that allow you to speculate on the price of ETH in the future. Therefore, if you go long in ETH, and if the market closes at or above the price specified in the futures contract, you will make money on the trade. Alternatively, if the market drops, you will be able to profit from ETH through a short position.
The other side of the coin is Bitcoin, which is widely accepted as a cash substitute. While it may be less volatile than other cryptocurrencies, it does offer an assurance of safety that cannot be found with other cryptocurrencies. It is therefore the ideal pick for hedging your investments. By purchasing Bitcoin futures, investors are able to gain exposure to Bitcoin without actually owning the underlying cryptocurrency.
Each actor in the Bitcoin ecosystem uses Bitcoin futures for a unique purpose. Bitcoin Futures, for example, allow Bitcoin miners to lock in prices that guarantee a return on their mining investments regardless of the price trajectory of the cryptocurrency in the future. Investing in Bitcoin futures is a way for investors to hedge their positions.