How does the concept of perpetual futures differ from traditional futures contracts in the cryptocurrency industry?

3 answers

• Dec 27, 2021 · 3 years ago
  Perpetual futures contracts in the cryptocurrency industry are a type of derivative that allows traders to speculate on the price of an underlying asset without actually owning it. Unlike traditional futures contracts, perpetual futures do not have an expiration date, which means they can be held indefinitely. This makes them more flexible for traders who want to take long or short positions without being constrained by a specific time frame. Additionally, perpetual futures contracts are settled in cryptocurrency rather than fiat currency, which adds another layer of complexity and risk to the trading process.
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• Dec 27, 2021 · 3 years ago
  Perpetual futures contracts differ from traditional futures contracts in the cryptocurrency industry in several ways. Firstly, perpetual futures contracts do not have an expiration date, which means they can be held indefinitely. This is in contrast to traditional futures contracts, which have a fixed expiration date. Secondly, perpetual futures contracts are settled in cryptocurrency, whereas traditional futures contracts are typically settled in fiat currency. Finally, perpetual futures contracts often use a funding rate mechanism to ensure that the contract's price closely tracks the spot price of the underlying asset. This mechanism helps to prevent large price discrepancies between the contract and the underlying asset, which can occur in traditional futures contracts.
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• Dec 27, 2021 · 3 years ago
  Perpetual futures contracts are a unique feature of the cryptocurrency industry. Unlike traditional futures contracts, perpetual futures do not have an expiration date, which means they can be held indefinitely. This makes them particularly attractive to traders who want to take long or short positions without being constrained by a specific time frame. Additionally, perpetual futures contracts are settled in cryptocurrency, which adds another layer of complexity and risk to the trading process. Overall, the concept of perpetual futures contracts offers traders more flexibility and opportunities for profit in the cryptocurrency market.
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