CRYPTOCURRENCY
Understanding Futures Expiration And Its Impact On Prices
Understanding the aging of futures and its effect on cryptocurrency prices
In the world of cryptocurrency. One of the key part of these futures contracts is the validity, which can significantly affect cryptocurrency prices and provide insights to investors.
What are your futures contracts?
Future agreement with encryption currencies.
Future aging
When it comes to cryptocurrency, such as Bitcoin and Ethereum, aging refers to the point where the contract becomes worthless. This is usually done one year after the date of entry into the contract. There are two types of futures contracts:
Cash Setter with no delivery, and
Delivery where the investor must physically receive his cash booking.
Impact on cryptocurrency prices
The termination of the validity of cryptocurrency fundraisers may have a significant impact on prices:
- This is due to the fact that investors cause prices quickly.
- Price spikes and immersion : April 15 is likely that there will be a sharp drop (or “spike”) on the market after May 16, followed by rebound.
- Market reaction : This
Factors affecting the aging of futures
Several factors may affect the termination of the validity of cryptocurrency fundraisers:
- Market Feelings : Investors’ opinions and market expectations play an important role in determining the probability of expiry.
- Contract size :
.
Example: Aging of Bitcoin Futures
Cryptocurrency prices, let’s look at the example:
In April 2020, and the Bitcoin funding agreement ended on 7 May. At that time, $ 10,000 would not have needed cash or delivery. As a result, investors would not have encountered additional costs or reap.
However, when a sudden loss of value on May 7, which was not anticipated by investors, led to a strong increase in volatility.
conclusion
Price for cryptocurrency. Understanding how these agreements end and the factors affecting them are essential for investors.
