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What Is the Purpose of a Futures Contract in Cryptocurrency Trading?

A crypto futures contract locks in a future price to either hedge against risk or speculate on price movements.
Greeks.Live29.10.25

What Is the Purpose of a Futures Contract in Cryptocurrency Trading?

A futures contract is a legal agreement to buy or sell a specific cryptocurrency at a predetermined price on a specified future date. Its primary purpose is to allow investors to hedge against price volatility or to speculate on future price movements.

For example, a Bitcoin miner might sell futures contracts to lock in a price for their future production, protecting them from a potential price drop. Conversely, a trader might buy a futures contract if they believe the price of the cryptocurrency will rise, without needing to hold the actual asset.

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