What are the differences between Bitcoin perpetual futures and traditional futures contracts?

1 answers

• Dec 26, 2021 · 3 years ago
  Bitcoin perpetual futures and traditional futures contracts have distinct characteristics. Perpetual futures contracts, like those offered on BYDFi, are perpetual in nature, meaning they do not have an expiration date. This allows traders to hold positions for as long as they want. Traditional futures contracts, on the other hand, have fixed expiration dates, which require traders to close their positions before the expiration date. Another difference is the settlement currency. Perpetual futures contracts are settled in cryptocurrency, while traditional futures contracts are settled in fiat currency. This difference in settlement currency can impact the trading strategies and risk management of traders. Additionally, perpetual futures contracts often have funding rates that are used to maintain the contract's price close to the spot price. These funding rates can result in additional costs or profits for traders, depending on their positions.
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