Why Is Cash Settlement Often Preferred for Highly Volatile Assets like Cryptocurrencies? ▴ Learn

Why Is Cash Settlement Often Preferred for Highly Volatile Assets like Cryptocurrencies?

Cash settlement simplifies the logistics of the transaction, avoiding the need for the physical transfer and custody of the volatile underlying asset. More importantly, it reduces the risk of operational failures or delays during high-volume settlement periods.

This efficiency is crucial in the fast-moving, 24/7 cryptocurrency market.

How Does the Volatility of the Underlying Asset Affect the Choice between Physical and Cash Settlement?

Why Are Most Cryptocurrency Futures Contracts Cash-Settled?

Why Are Physically-Settled Bitcoin Futures Less Common than Cash-Settled Ones?

Which Consensus Mechanism Is Generally Preferred for a Derivative Token’s Underlying Asset?