Top 7 Advantages of Trading Bitcoin Futures (Instead of Bitcoin)
You’ve traded Bitcoin by now. You’ve gotten used to opening an account, placing a trade, making a profit or loss. But whether you’re a HODLer or an active crypto trader, it’s time to think about trading Bitcoin futures. Why? Because there are a ton of advantages to Bitcoin futures trading that you don’t get from regular trading.
Don’t let fancy terms like 'derivatives' and 'leverage' put you off. Check out the top 7 advantages to trading Bitcoin futures below as well as answers to questions like where to trade Bitcoin futures.
1. Make Money in a Bear Market
Despite the DGTX soaring in value ($0.047 at time of writing!), the crypto markets have been nothing short of a bloodbath this year. When the overriding trend is down and the crypto industry lost some 75 percent of its value, it isn’t easy even for experienced traders to make money.
Trading in BTC futures (or Ethereum or Litecoin futures) allows you to apply creative strategies to make money even in a bear market. In fact, you can pursue short-term, low-profit-margin scalping strategies (Digitex Futures CEO’s favorite) and make small gains every day--as long as they don’t get eaten up by commission fees.
2. No Commission Fees When You Trade Bitcoin Futures on Digitex
Of course, as our CEO learned first-hand from pit trading back in the 90s, these types of aggressive trading strategies only work if your profits don’t get eaten up by commission fees. He lived through the daily frustration of watching profitable days turn into losing ones and having to cede chunks of his profits to the exchange.
While Digitex's BTC Futures exchange is still under development, the public testnet is coming November 30, 2019.
3. We Have Automated Market Makers
Wondering how to make money in futures? The key element in any exchange is undoubtedly liquidity. Once the Digitex Bitcoin futures exchange launches, we’re sure to hit the network effect out of the park. As more and more traders enjoy commission-free trading and flock to our exchange, that naturally means a higher trading volume, which means more liquidity.
But, for times of extreme volatility, we’ve thought way ahead through automated market making. These are programmed bots that are designed to actively trade and lose money to increase liquidity.
Liquidity is so important to our exchange that we allocated 100 million DGTX (10 percent of the entire supply minted in our ICO!) to these market makers to ensure we maintain liquidity and honor all trades.
4. You Can Try Going Short
We’re confident that the markets will see an upswing soon, but if they don’t, trading Bitcoin futures is the best way to ride out this low patch. Traders can practice short selling Bitcoin on our BTC futures exchange platform. This means that they can sell something they don’t own--and reap the profits when the prices fall!
You can pick up some basic trading skills just reading up on our blog, but going short is an essential strategy in long hard bear markets to sustain a living.
5. Guaranteed Reduced Slippage
Slippage may sound like something that happens when spilling your drink. But when it comes to trading, it means something else entirely. What? Slippage is essentially the difference between the expected price of a trade and the actual price that the trade is executed at.
Obviously, the higher the volatility, the higher the slippage. And the higher the order, the greater the chances for some slippage (AKA nasty surprises) to occur.
Digitex Futures will reduce slippage by creating highly liquid markets that lead to thick order books. This means that traders, whether long-term or short-term, high or low profit, can benefit from the security of knowing their order will be placed with next-to-no slippage.
6. High Leverage on Our BTC Futures Exchange
Let’s talk leverage for a moment. It’s always a good idea to have leverage over someone else, right? And when you trade BTC futures instead of just Bitcoin, you get to use leverage courtesy of us.
That means that you can take larger future positions than you could if you were purchasing actual Bitcoins...
In other words, we lend you the balance you need to place the BTC futures order you want.
How is this possible? Because futures traders only need to allocate the money they stand to lose on the trade, rather than the entire purchase price.
You could think of it as a loan. Digitex traders can enjoy up to 100x leverage, which can result in way larger profits (and of course losses) than using a traditional trading exchange.
7. One-Click Trading
One key factor when it comes to getting good at short-term scalping is speed. Your ability to keep your eye on the ball, and strike when the iron is hot is paramount. Many crypto exchanges right now are over-complicated and this is no different for many a Bitcoin futures exchange. You end up wasting time clicking through steps that could result in losing money.
Digitex’s Bitcoin futures exchange has an in-built trading ladder that shows the Bitcoin futures market vertically. It’s a simple layout that displays bids on the left and offers on the right.
It may take you a little while to get used to, but it won’t be long before you watch market movements happen in real-time and see the bids moving up and down in the vertical price column. Watch, wait, and--click! Your BTC futures trade is placed in a single easy movement, without having to take any extra steps.
Where To Trade Bitcoin Futures
Bitcoin futures trading may seem intimidating at first. But, like all things blockchain, most of us are learning on the job. If after reading this you’re ready to try an exciting and profitable way of trading, and you’re wondering where to trade Bitcoin futures, wonder no more! You’re in the right place.