Many CFD platforms (CFDs – contract for difference) and exchanges where futures are traded give you the opportunity to speculate on cryptocurrencies, but, in particular, do not allow you to use cryptocurrency as margin collateral.
Cryptocurrency settlement futures represent a direct scenario for using cryptocurrencies, because they require the use of the asset itself for settlements.
Holders never need to sell
Many crypto holders do not want to transfer their coins to the exchange for sale in order to manage risks.
With crypto futures, you can send part of this crypto asset to the exchange to create a hedging position, with which you will earn more cryptocurrency as the price decreases. From the point of view of financial engineering, this creates a “synthetic dollar position”. Thus, you make the perfect hedge in US dollars without using dollars or selling your cryptocurrency.
Improved Risk Hedging Tools
How frequently do you hear people state that the X cryptocurrency is too volatile to be used in business as a means of payment? Reverse crypto / USD futures allow you to hedge the dollar value of a cryptocurrency using only the crypto asset itself.
This makes storing cryptocurrencies less risky, as you can use your crypto asset to save its dollar value! These tools provide an opportunity to “smooth out” the cryptocurrency volatility for payees who use this argument to avoid using cryptocurrency in their business. These are risk-averse firms. To integrate their business with a crypto world, they need appropriate solutions that can reduce the resulting risks of cryptocurrency ownership.
More liquidity for the cryptocurrency market
Futures and other derivatives make it easier for people to enter and exit cryptocurrencies, as liquidity grows when more and more available and varied instruments for traders appear.
Cryptocurrency market makers like GlobalCTBcan more effectively manage their positions if they have at their disposal a tool such as futures that allows hedging risks in any direction, which, in turn, provides liquidity in the basic spot markets.