How well do futures on Bitcoin work?
Futures contracts for Bitcoin work the same way as regular futures contracts. In a Bitcoin futures contract, both sides agree to trade a certain amount of Bitcoin at a certain price on a certain date in the future.
The trader can hold on to the contract until the end of time. At that point, the buyer or seller will send or receive the agreed-upon amount of Bitcoin to keep their part of the deal. If the dealer wants to get out of the contract before it ends, they can do so by selling it to someone else.
The market sets the price of a Bitcoin futures contract based on how valuable Bitcoin is at the time the contract is made. This value is affected by supply and demand on the market, speculation, and how well the cryptocurrency business is doing overall.
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