How does the concept of perpetual bitcoin futures work?

1 answers

• Nov 30, 2021 · 3 years ago
  Perpetual bitcoin futures work by using a funding mechanism to keep the contract's price in line with the spot market price of bitcoin. This funding mechanism ensures that the contract's price stays close to the underlying asset's price, preventing large deviations. Traders can take long or short positions on perpetual bitcoin futures, depending on their market outlook. If a trader believes that the price of bitcoin will increase, they can take a long position and profit from the price appreciation. On the other hand, if a trader believes that the price of bitcoin will decrease, they can take a short position and profit from the price decline. Perpetual bitcoin futures are popular among traders due to their flexibility and the ability to trade with leverage. However, it's important to note that trading perpetual bitcoin futures carries a high level of risk and may not be suitable for all investors. It's always recommended to do thorough research and seek professional advice before engaging in any trading activities.
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