Binance reveals the secret to the success of their future contracts
Cryptocurrency trading is one of the most lucrative and risky activities in the crypto world. Generating huge profits and huge losses in a matter of minutes. But, far from what people believe, to participate in the crypto market you don’t need to buy virtual currencies. You can use other financial products such as futures contracts on Bitcoin. About whom Binance reveals the secret of success.
Future contracts: A growing market
The classic way of investing in any asset is to acquire it at a price, waiting for its price to skyrocket to sell it for a profit. This is the easiest way to generate profits in the market, buying low and selling high.
However, financial markets over time have been expanding more and more. Emerging new products that allow you to invest in an asset, even if you never buy it. Or giving the opportunity to bet not on the increase in its price, but on its collapse. Binance allows you to explore this area of crypto trading.
This is where future contracts on any asset come in. Well, they consist, in simple terms, of a contract between two parties, who undertake to exchange a certain asset, at a pre-established price at a future date agreed in advance.
In other words, the price indicated by the market for said asset does not matter, but rather the price established in advance by the two parties. If the commitment is for the sale of 1 Bitcoin at $ 50,000 within two months, no matter that said Bitcoin is trading at $ 1,000, the sale will be for 50,000.
Today, most future contracts are never executed, but are financial products that traders use to bet on the performance of an asset. Being an even bigger market, in the case of cryptocurrencies, than the direct transactions market.
Binance’s secret to success
Within the world of buying and selling future contracts on Bitcoin, there are a group of large exchanges that offer this product. Being some of the traditional leaders of this market, the giant CME Group, and the important exchange BitMEX.
However, a new actor recently entered this market by stomping. We refer to Binance, one of the largest exchanges in the world, which launched Binance Futures a little over half a year ago. Your platform for exchanging future contracts on Bitcoin.
In this short time it has already managed to position itself as the second force in the futures market, recently moving to BitMEX. Before which, Aaron Gong, Vice President of futures at Binance, commented in an interview what would be the secret of the success of the exchange in this sector:
“We are the first major cryptocurrency exchange to launch a maximum leverage of 125X for BTC contracts, and the first of its kind to launch a smart settlement and cross-guarantee mechanism. These features have gained tremendous popularity among our users.Aaron Gong commented in the interview.
Thus, Binance would declare that the secret to the success of its future contracts is the technical characteristics of its platform. Offering functionalities that no other exchange offers, and that would allow them to earn the loyalty of users. An interesting vision that makes this our Data of the Day here at CryptoTrend.
