The cryptocurrency market is changing on a day to day basis in terms of the trading options. Things have evolved too fast, about one year ago a group of analysts predicted the beginning of the bear market, lasting for the period of few months. All of them expected to have the bright days of the Bitcoin trading back to the game.
However, the bear market has continued forming out and reach the final its final point. Unfortunately, it has become impossible for both day and long-term oriented traders to make some profit by trading digital assets. That was the reason why a bunch of them have decided to look for the new ways of taking financial benefit out of the crypto market.
One of the most popular and effective methods of earning good amount of money in the cryptocurrency market is by predicting the future price of certain coins. It may seem impossible for most of you, but not that hard as the majority of the traders think.
How Does Future Trading Look Like?
Rooting for future contracts is a brand new way how the investing works, but it surely requires having years of experience in risk management systems. When you make the purchase of the contract, the only thing that you have to do is to guess what the future price tag of the cryptocurrency will be.
If you successfully manage to guess the lower cost of the digital asset at the time of contract expiration, then cashing out is the only thing to do. This method is also known as going-short technique. You might have already got it right that the go long is the opposite statement, meaning that bypassing the asset price will lead to having success.
Future contracts vary, some of them offer leverage specifications, meaning that you as the trader are given a chance of multiplying the losses or gains. Surprisingly, in the world of cryptocurrency, the so-called futures contact can contain close to 25x leverages, meaning that winning the trade equals to profiting by 2500%. On the contrary, losing the prediction may lead to complete disaster.
The above-described technology may sound like a gambling scheme, but that’s how modern financial technology operates. That’s the thing that made this particular market famous around the whole world, leading to having trillion dollar niche. The predicting future the correct way is the way the majority of the international banks work. Additionally, involving the biggest financial industries will lead to exponential market growth anytime soon.
Cash-settled markets provide the traders with an ability to speculate the future price of BTC, also known as Bitcoin, without even holding the digital asset. The way the cryptocurrency futures work will surely get the attention of the leading banks and institutional investors, but no one knows if they will decide to enter the market without hiding the identity.
Considering the fact that crypto space is more friendly and easily adaptable than the traditional financial world, makes the future of the market unpredictable because of having too many traders, brokers and investors entering the market.
End of Traditional Financiers?
The fear of the market has successfully worked out in terms of having the institutional investors away from the niche. Before the time of having the crypto futures available onto CME and CBOE, the news had already been spread through the Wall Street, making the market questionable.
The CEO of the biggest brokerage firm, Thomas Peterffy published the official document, talking about these concerns that came after having the opportunities of the cryptocurrency futures. According to the sources, there’s a risk of facing a similar recession crisis, that had happened back in the year of 2008.
Market Manipulation is the Key Factor
Everybody expected to have some sort of financial manipulations in the crypto market. Without a doubt, it may have already happened, but no one realized the scale of it. By the end of June of 2018, JPMorgan Chase and Co received the $65 million fine regarding interfering its financial reports. The general purpose of the company was to somehow influence the interest rates of the USD International Swaps.
CityBank faced the same issue, the company was fined for more than a hundred million US dollars. They had been trying to manipulate the interest rate across the entire market.
Do you even image placing the so-called bet that the price of the certain digital currency will decrease by 25 percentage by the contract expires? Yet, no one can estimate how dangerous it could be in terms of changing the prices. Usually, inexperienced investors will sell the entire amount of assets once they see the price drop, leading to having the market breakdown.
If your contract predicted the price drop and the process starts, there’s a chance of winning the bet. Moreover, the traders may be given a chance of buying the cryptocurrencies back with the special discount. Some experts believe that the latest price bubble that formed by the end of 2017 was directly caused by manipulating the digital assets the wrong way.
At the current moment, the CBOE futures market unites a higher percentage of the institutional investors rather than the retail ones. According to the experts, it will take some time to balance the market, providing all kinds of products to the new exchanges will increase the overall performance. The end goal would be to have professional and legally-backed cryptocurrency exchanges available to the traders, investors and brokers, seeking to make some juice profits.