Invisible power behind the cryptomena market: the power of one price
In recent years, cryptocurrencies such as Bitcoin and Ethereum have gained considerable attention for their potential of the revolution in the way we are considering money and transactions. While many investors are attracted to the high rates of digital currency growth and speculative attraction, few people realize that the game is even stronger:
Futures Premium
.
In this article, we dive into the world of cryptomen and examine how one price can have a deep impact on business decisions. We will examine the concept of futures premium and its role in shaping the cryptom market.
** What is the PREMIUM futures?
Futures premium, also known as “Futures Spread”, refer to the difference between two prizes: the current supply price supply). In other words, it is the difference between the price you pay today and the price you could get in the future.
For example, let’s say you are considering purchasing a bitcoin contract with a one week maturity period. The current spot price is $ 25,000, while the price of futures is $ 24,500. Futures premium would be:
$ 24 500 (futures price) – $ 25,000 (spot price) = – $ 250
In this case, you will pay $ 2,500 for the purchase of the contract today, but theoretically, it could be sold up to $ 26,000 a week per week. This means that buying a $ 25,000 spot price would give you a 13.8% return on investment.
The impact of premium from futures on trading
Futures Premium has a significant impact on trade decisions, especially on the cryptomen market. Here are several ways to work:
- This is especially true in times of high volatility or when traders believe that the price will increase rapidly.
- Risk Management : On the contrary, lower futures prices may indicate that market sentiment has changed and investors are becoming more cautious. This can lead to a reduction in purchasing activity and an increase in sales pressure, which can be beneficial to traders who want to limit their losses.
- Order flow
: Futures Premium also affects the dynamics of orders flow in the crypto market. If there is a significant difference between futures prices and spot prices, it may affect the movement of the price of individual cryptocurrencies.
Examples in real world
To illustrate the impact of the futures bonus on trading decisions, consider two examples in the real world:
- Bitcoin : During 2017 Bitcoin reached a maximum of $ 19,666 and then experienced a significant repair of approximately $ 6,000. The futures range was considerable, with a price difference of more than 3,400%. This has led to an increase in purchasing activities and higher prices of individual coins.
- Ethereum : In March 2018, the Ethereum network has seen a significant increase in demand as a result of increasing use as a platform for decentralized applications (DAPPS). Futures expanded significantly, with a price difference of more than 7,000%.
Conclusion
The concept of futures is often overlooked by traders and investors, but it is an essential aspect of the crypto market. By understanding how these phenomena effects trade with business decisions, individuals can make more informed investment decisions and potentially profit from complex dynamics in the game.
When the crypto -market market is constantly evolving, it is essential that traders remain informed about the futures premium and its impact on prices. By recognizing the power of this concept, we can gain a deeper understanding of the complex forces that manage the market and make more deliberate business decisions.
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