Guides

What You Need To Know About Bitcoin Futures

Published

6 years ago

July 31, 2018

There are several ways that bitcoin investors can participate in the market. Bitcoin can be bought on dedicated exchanges or via peer-to-peer marketplaces. Some of the largest exchanges include Binance, Coinbase, and LocalBitcoins. You can also trade bitcoin in the futures market on the U.S. derivatives exchanges CBOE and CME. In this article, you will discover what bitcoin futures are and learn about some of the advantages of these instruments.

Understanding Futures Contracts

Before we begin our discussion of bitcoin futures, we should first take a moment to understand what a futures contract represents.

A futures contract is an agreement to buy or sell a particular asset at a specified price and at a specific date in the future.

Futures traders can either take a long position to buy a contract if they believe that the price of that specific asset will rise in the future or take a short position to sell a contract if they believe that the price of that specific asset will fall in the future.

Generally, futures products can be settled in one of two ways: cash or physically settlement. In the case of bitcoin futures, we won’t actually take delivery of the cryptocurrency but instead, the trade will be settled in cash within our brokerage account with either a credit if we made a profitable trade or a debit if we made a losing trade.

There are many different reasons why market participants engage in the futures market. Two of the main reasons include hedging and speculation. Hedgers try to reduce their overall risk of adverse price moves in the asset. They often do this by trying to lock in the current price of the asset if they believe that prices are likely to head higher in the future.

BTC Let’s take a look at how a hedger would utilise the futures market using a Clothing manufacturer as an example. Our clothing manufacturer needs to purchase large quantities of cotton as part of their production process. The price of cotton may be trading at that time at $90 per contract and the contract specification for CT (Cotton) is 50,000 lbs. of cotton per contract, and the minimum price move is $5 per point (1/100 of a cent).

The clothing manufacturer requires 10,000,000 lbs. for the next 6 months. This company who is considered a commercial interest has vast knowledge of the industry, and they have come to believe that the price of cotton is likely to rise substantially over the next 6 months to about $110 per contract. So, they decide that they should lock in the current price of cotton now at $90. They purchase 200 contracts of Cotton in the futures market to cover their requirements and lock in the current price.

If after six months later, the price of cotton rises to $110 per contract as they had anticipated, then they could have saved approx. $2,000,000 in the raw cost of cotton.

(110-90 = 20 x 100 = 2000 point move per contract x $ 5 point value = $ 10,000 per contract x 200 contracts) = $ 2,000,000.

The second major type of participant in the futures market is the speculator who is looking to make a profit from potential price swings, either up or down but is not interested in taking delivery of the traded contract. They are simply looking to buy low and sell high, or sell high and then buy back lower.

How to Trade Bitcoin Futures

Due to the huge volatility that bitcoin prices often experience, the margin requirements are typically much higher for bitcoin futures contracts as compared to other financial instruments. But regardless, futures traders can still take advantage of some additional leverage by trading bitcoin futures contracts.

We will discuss two major exchanges for trading bitcoin Futures. This includes the Chicago Board of Exchange (CBOE) and the Chicago Mercantile Exchange (CME).

Bitcoin futures opened for trading on the CBOE in early December 2017. Later that month, the CME made their debut into this market by offering their own bitcoin futures contracts. This was a big step forward for bitcoin enthusiasts. It marked an important transition in the minds of traders and investors. Instead of being considered as something on the fringe, bitcoin became more mainstream and more widely accepted. One of the reasons for this is that with the backing from both these major derivative exchanges, it brought about more transparency and liquidity into the market for bitcoin traders and investors.

There are some major differences between the bitcoin futures contract listed on the CBOE (symbol XBT) and the bitcoin futures contract listed on the CME (symbol BTC).

Let’s discuss some of the key differences:

Contract Size: XBT is equal to 1 bitcoin, BTC is equal to 5 bitcoins.

Minimum Price Fluctuation: XBT $10, BTC is $ 25

Minimum Margin Rates: XBT 40%, BTC 35%

Clearing: XBT is cleared by Options Clearing Corporation, BTC is cleared by CME ClearPort

Advantages of Bitcoin Futures

There are many advantages for bitcoin investors who are interested in speculation to get involved in the market through the use of bitcoin futures contracts.

Here are four major reasons why cryptocurrency traders and investors should consider bitcoin futures.

Better Liquidity – In the financial markets, liquidity is everything. You want to be able to buy and sell with minimal transaction costs and slippage. Trading bitcoin futures allows investors to obtain tight bid-ask spreads facilitated by the exchanges.

Increased Transparency – One of the biggest challenges for the bitcoin industry has been providing a high level of transparency and uniformity. Bitcoin futures contracts help solve this problem as each day the contracts are settled using a reference price.

Ability to Sell Short – When you participate in the futures market you can make money from both up moves and down moves. This is an excellent feature of the futures market. So, as a bitcoin speculator, you can buy low in anticipation of higher prices or you can sell high first and buy lower at some later point in anticipation of lower prices.

Regulated Exchanges – Although the word “regulation” tends to cause many bitcoin enthusiasts to twitch when it comes to speculating, some level of regulation may not be so bad after all. The bitcoin futures contracts that we have discussed are regulated by the CFTC (Commodity Futures and Trading Commission). This has helped to bring more mainstream investors into the Bitcoin market, and the volume on these instruments has subsequently increased. This is a good thing, as greater volume and acceptance will provide for better liquidity and efficiency for speculators.

Summary

You should now have a good understanding of what bitcoin futures contracts are and how to get started with trading these instruments. It is important to keep in mind that bitcoin futures typically offer additional leverage, and so they should be traded responsibly with a keen eye on risk control.

This article was contributed by Vic Patel of Forex Training Group. He is a full-time trader with many years of experience in both the Foreign Exchange and Futures markets.

Guides

How to Deposit and Withdraw at Crypto Casino Crashino?

Published

2 years ago

September 16, 2022

Guest Contributor

Playing at online casinos might be your go-to favourite fun time during the day, but did you know that you can use your crypto to play as well? Crashino is the next generation of online casinos! Learn how to register, deposit, and withdraw from Crypto Casino Crashino. This is a very easy and step-by-step guide on how to make your deposit at Crashino with Crypto.

HOW TO CREATE YOUR CRASHINO ACCOUNT?

1. Go to Crashino.com

2. Click on Register Button

3. Enter your email address and password

4. Choose your preferred FIAT currency (USD/EUR)

5. Click on the SUBMIT button

6. Now you are registered already, and you can take the Crash rocket to the moon!

Now it is time to transfer your crypto to Crashino and start playing! If you don’t have crypto yet, you can go to Binance or any other respected crypto wallet and buy crypto easily.

You can choose more than 12 cryptocurrencies to deposit with, you don’t have to think about their price volatility. While you play at Crashino, you play with your preferred FIAT currency that you chose upon registration. Only once you make your withdrawal do you need to choose which cryptocurrency you would like to cash out with.

Please choose USD as account currency and deposit with USDT if you want to stay away from the volatility big time.

HOW TO DEPOSIT AT CRYPTO CASINO CRASHINO?

1. Click on Deposit Button

2. Click on the Nomipay icon

3. Choose the Cryptocurrency you prefer to use

4. Enter the amount you wish to play with and click on Submit

5. Now, you are redirected to the Nomipay page with the depositing address.

6. Send your crypto to the address, and it will be transferred to your account!

You can use the QR code to scan your wallet and make your deposit there, or you can copy the address from this page and make the transaction in your crypto wallet to this address.

You can choose from any of these cryptos at Crashino: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Dogecoin (DOGE), Tether (USDT), UsdCoin (USDC), BitcoinCash (BCH), Solana (SOL), Binance (BNB), Dai (DAI), Shiba (Shiba), Tron (TRX)

HOW TO WITHDRAW YOUR WINNINGS FROM CRASHINO?

1. Click on your account icon

2. Navigate to My Wallet and Withdraw section

3. Choose the Cryptocurrency you prefer to use for cash out

4. Enter the Crypto Address you wish to send your withdrawal to

5. Enter the amount you want to cash out

6. Click on SUBMIT button

Now you have already requested your withdrawal. Please keep in mind that it can take up to 24 hours for your withdrawal to be processed, but usually, it’s much faster.

As you can see, it is very easy, it is to deposit and withdraw at Crashino, and you can use your crypto to play and win big. Start today by joining the Welcome Mission and get an amazing bonus of 100 Free Spins on top.

Guides

Can You Win Real Money by Playing Crypto Slots?

Published

2 years ago

July 1, 2022

Guest Contributor

Introduction to Crypto Slots

Crypto slots are a form of gambling machine that lets you take a chance with digital currencies. They’re reminiscent of old gambling machines, but they do have a surprise ending: you can bet your money using cryptos. This tends to make them an appealing choice for those interested in betting on Bitcoin or various other cryptos. The possibility of big wins has been one of the factors that make crypto slots quite thrilling. At a certain crypto slot machine, numerous players have won progressive jackpot valued at hundreds of dollars. There are a variety of jackpot sizes available, and they continue to increase as more players play them.

Is Playing Crypto Slots Legal?

In general, there are no laws that specifically apply to crypto slots. It is neither permitted nor prohibited by law. Authorities’ perspectives on cryptocurrencies are swiftly shifting, with more nations adopting a favorable stance and debating how to regulate them specifically as well as blockchain-based businesses in general.

Authorities in nations where gambling is outright forbidden, like the United States, may yet impose severe penalties on gambling websites and/or bettors who utilize cryptocurrencies. A few international gambling jurisdictions have already granted licences to casinos that accept cryptocurrency, implying that they accept responsibility for cryptocurrency operations on gambling websites. You can check out the top crypto slots sites listed in CryptoNewsZ’s gambling section.

Can You Win Real Money by Playing Crypto Slots?

They’re generally free-to-play, and if you hit it big on a cryptocurrency slot machine, you can cash out your prize money without having to pay a casino fee. It’s no surprise that people are increasingly preferring to play with cryptocurrencies rather than real money.

Tips to Play Crypto Slots?

There’s a little research you can do to improve your likelihood of victory when playing crypto slots. Here are some pointers to get you started:

Select a reputable gambling establishment. Not all casinos are the same, and some have a better reputation than the others. Before you choose a casino to play at, make absolutely sure you do your homework.
Go over the terms & conditions with a fine tooth comb. This is extremely true when it comes to crypto slots, as these games may have their own set of rules. Before you start playing, take the time to understand what you’re getting yourself into.
Play responsibly when gambling. Because crypto slot machines can be habit forming, set boundaries for yourself and don’t risk too much more than you can stand to lose.
Bonus seekers, do your homework. Some casinos have good bonus payments than in others, so do your research to see which one has the best possible deal prior to actually registering and dumping money into the account.
Keep a close eye on the jackpot in the game. Most of these games have jackpot games, which means that the prize grows as more people participate. These aren’t the games for you if you’re hoping for a fast win. However, if you have some spare time and would like to try your luck at winning a reality-changing prize, keep a sharp eye on the jackpot.
Practice with the demo before wagering real money. A few crypto slots give a free-play mode, allowing you to practise without risking any of your own finances. Before you begin placing bets, you could use this time to familiarise yourself with the game, figure out which strategic plan works the best, and estimate your prize earnings.

Related Article: Best Crypto Gambling Sites

Benefits of Playing Crypto Slots

Among the most compelling reasons for players to use cryptos are the unmatched advantages they can provide, such as instantaneity, security, and Internet of Value. Nevertheless, there are some advantages to using cryptocurrencies such as bitcoin and Ethereum to play slots. Many players would prefer confidentiality when they play – for example, folks who don’t want their betting history scrutinised when getting a mortgage! Players can also have complete anonymity when using blockchain-based currencies because they don’t have to provide any personal information other than their wallet number to connect their online casino account to their cryptocurrency account.

You must make sure that your payments are safe in order for no one else to gain access to the account and withdraw your prize money. In contrast to the traditional payment options, where you won’t see your money in the account for 3-5 business days after drawdown, cryptocurrencies provide amazingly fast and even immediate withdrawals, allowing you to enjoy your winnings sooner. With Blockchain technology and crypto-casinos, you could indeed play from anywhere in the globe. Low or no service charges are yet another added benefit of using crypto because there are no 3rd-party service costs to pay and also no payment restrictions.

Conclusion

Crypto slots are a form of gambling game that generates different numbers using blockchain technology. They’re a new take on traditional gambling machines, giving the players so much more control over their wagers because the figures aren’t generated by a single company or person. Crypto slot machines use random number generators to generate their outcomes, there is an element of luck engaged, but you can improve your likelihood of victory by planning how much you wager for every spin as well as which kinds of slot games to enjoy.

Guides

4 Tips for Managing Your Emotions When Trading Crypto

Published

3 years ago

April 19, 2022

Rachael Odhiambo

Dealing with emotions is a natural part of being human. How you feel can significantly impact the world around you, and that is an indisputable fact in life. However, the world of cryptocurrency trading can be an unforgiving place for the overly emotional. If you let your feelings cloud your decision-making, you risk selling too early, running losses, and missing out on significantly profitable opportunities had you stopped for a moment and thought the matter through with a clearer headspace.

For example, after hearing some concerning rumors, you rashly decided to empty out your XMR wallet and other crypto exchanges for fear of losing money. After some time, however, the prices bounce back higher than before, which is a cause for dismay because you lost all of your investment due to a rash decision on your part.

Hence, it is crucial to keep your emotions in check when trading. This is especially the case when you are trading in an extremely volatile industry such as cryptocurrency. The crypto market is notorious for its constantly fluctuating values and massive price swings. It can strike fear, panic, and greed in the least suspecting and cost you more than what you bargained for.

Whether you are new or experienced in dealing with crypto, managing one’s emotions is a must-have tool in your trader’s toolbox. To help you master this skill, here are some tips to keep in mind as you traverse the wild, harsh landscape of crypto trading.

Develop a Risk Management Plan

Risk management is an integral part of any kind of investment venture. You want to ensure that you have backups in place in case a situation arises that may threaten your initial investment. However, many new traders overlook the importance of considering their emotional responses and their risk tolerance when formulating their risk management plans. As a result, their plans crumble in the face of high-pressure situations.

As such, always consider your risk tolerance when developing a plan to mitigate trading risks. In fact, many trading consultants use it as a basis for forming your trading plan. By doing so, you can ensure that you are only taking on what you can handle emotionally as you work your way to reaching your financial goals. Over time, as you become more experienced and more in control of your emotional responses, you can decide to take on more risks.

Conduct In-Depth Research

One of the most effective ways to handle frantic feelings is to counter them with cold, harsh facts. Aside from your risk management plan, it is wise to conduct some research on your own that can substantiate or debunk any concerning news or rumors that might cause you to buy or sell on an impulse. For example, after hearing from another trader that one of the digital coins you invested in has died due to a lack of community support, you might be tempted to liquidate the entirety of your investment. However, after some digging, you determined that the community is still active and invested in improving said cryptocurrency.

It is also important to do your homework when picking which coins to support. Make sure to check the cryptocurrency’s whitepaper and the developers’ activities for a clearer idea of the coin’s potential. In this manner, you can feel assured that your investments have a high potential of bearing fruit in the future.

Do Not Obsess Over Market Charts

Many traders new to the crypto industry fall into the trap of obsessing over market charts. The constant flickering of colors and lights can be hypnotising to the unaware. They watch price fluctuations all day to ensure that they can take note of sudden price hikes and dips, which may lead down a path to profitable opportunities.

However, this method is not helpful to your mental and emotional health. Indeed, it can feel like an emotional rollercoaster watching prices go up and down continuously. Processing significant amounts of information for too long can wear you down over time and may instead cause you to decide poorly when an opportunity arrives. Thus, a word of advice: do not let the market chart take over you.

Take Advantage of Limit Orders

Signing into your crypto exchange after some time and learning that the value of your investment has plummeted is a reasonable fear for many traders. After all, it is not healthy to watch market charts like a hawk, and in the crypto space, so many things can happen after a short span of time. Fortunately, many crypto exchanges have stop-loss features. This is a feature that automatically sells your coins once their prices decline to a certain value. In this manner, you can feel assured that your investment remains intact, assuaging any fear or worry you may have while not on the crypto exchange.

Removing emotions from any decision-making process that you make is almost impossible. In a highly complex and volatile market like cryptocurrency, conquering your initial emotional responses and maintaining a clear head is a skill that you have to master through experience. By doing so, you can keep your eyes on the prize and trade in a manner that is most helpful to your needs.