How interest rates affect bitcoin futures price

Being aware of the interest rates at which traders can borrow and lend their USD or BTC is crucial as it can tell you a lot about the market sentiment and, possibly, let you make riskless profits with arbitrage. In bull markets, there's usually a high demand to go long…

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A simple explanation of the interest rate swap

You can go short or long on interest rates with interest rate swaps. For example, you take a $100,000 loan from a bank with a fixed interest rate of 5%, and a year from now, you will have to repay $100,000+5% = $105,000. If the rates rise throughout this year,…

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Understanding non-linear nature of inverse futures

As of today, inverse futures contracts, devised back in 2011, are the most popular derivative for trading Bitcoin and other cryptocurrencies, with volumes reaching billions of dollars in a single day. As you probably know, these derivatives are not your usual direct futures contracts and are a bit more complicated.…

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Spot trading vs. inverse futures trading

Before proceeding, it would be best if you read these two articles to get a better understanding of inverse futures contracts: What is inverse Bitcoin futures contract? Understanding okex futures basic mechanics Trading on the spot means trading a non-derivative pair like BTC/USD on a regular exchange (Bitstamp, Coinbase, et…

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What is inverse Bitcoin futures contract?

Most likely you already know, that futures contracts trading is possible without physical delivery of the traded asset and profit/loss is settled directly in cash between parties (explained here: What is a futures contract?). In case of Bitcoin and other cryptocurrencies, the ability to trade them versus fiat currencies without…

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