Futures contracts are incredibly popular in the crypto world as they give institutional investors a quick and easy way to gain long-term access to the crypto markets without the need to sign up to a crypto exchange and store cryptos in a wallet. Huobi has decided to launch XRP futures on its Huobi DM exchange which already supports Bitcoin, Litecoin, Ethereum and EOS futures trading. XRP has been picking up steam in the past few months and there is more investor demand for XRP products on the market.
How Do Futures Work?
If you’re unsure about the wonderful world of futures, you might be left feeling a little confused about all the fuss. Futures give investors a quick and easy way to gain crypto exposure without actually holding any cryptocurrencies. There are two options when it comes to futures, long or short. If you take up a long position you’re betting that the market goes up. If it does indeed close higher when the contract expires you will make a profit. However, if markets close lower on expiration you will incur a loss. Conversely a short contract is a bet that the market will be lower at the time of expiration.
Weekly and Bi-Weekly Contracts
Not all futures are the same, they all have different lengths. These new XRP futures will come with both weekly and bi-weekly expirations, giving investors of two short contracts. Typically, futures last for anywhere between six months and a year, but Huobi DM doesn’t offer any of that length at the time of writing. These new XRP futures come with the ability to margin trade – a great way to make extra profit without risking your entire bankroll. However, when margin trading losses are amplified by the same margins – so be careful.
CBOE Halting BTC Futures
The Chicago Board Options Exchange (CBOE) was one of the first exchanges in the world to list Bitcoin futures back at the crypto peak in 2017, but after low trade volumes, it has decided to put a halt to its BTC futures. According to official data, there was a lack of trade volume and a lack of interest in the product. It could simply be due to the fact these futures were more geared to institutional investors rather than your average crypto trader, but either way, CBOE futures are no more.
XRP is having a huge month as just last week it got listed on Bahrain’s first Sharia compliant crypto exchange. XRP has been steadily climbing on the back of the news, and this new XRP futures contract option will further add to the XRP hype. XRP fans will be reveling in the news, and so will the crypto traders.