How to Boost Your Digital Currency Trading with Bitcoin Futures & Swaps?

This is one of the biggest questions right now in the crypto land and if you are also looking for the answer to this question then you are in the right place. In this article, we are going to explain in details what futures and swaps instruments are and how they will help you in your digital currency trading. Take a look.

Futures and Swaps

The nature of Futures and swaps are quite similar to each other. Both of these instruments are trading contracts that allow clients to switch currencies in a regular interval of time, at a certain price. The only difference between these two is the time of application.

Future Contracts: As the name suggests, it is a way of agreeing to buy or sell digital currency at a specific price on a future date. Future contracts are generally traded on cryptocurrency exchange and can be used by many kinds of investors.

Advantages of Futures Contracts
 The cost for trading futures is very low as compared to currency forwards.
 Future contracts provide a very low margin
 Future contracts are on exchanges so somewhat reduce counterparty risk

Swaps: It is an agreement between two parties to exchange financial assets in a specific or in multiple dates. A bitcoin swap is typically a peer-to-peer swap between bitcoin and other cryptocurrencies without intermediaries.

Advantages of Swaps Contracts
 Swap involves a series of payments in the futures.
 No intermediaries are required to exchange the cryptocurrencies.
 Swaps can continue for a much longer period and payments happen in several times.

Risks Associated with Futures and Swaps

Futures and swaps trading consist some set of risks from which users should be aware of. Here are some of the associated risks:

 A user may face the harmful market manipulation by a platform
 Crypto pairs even more volatile than fiat
 Pairs’ value (crypto or fiat) movement might go against the investor’s predictions


Both of these instruments work great in digital currency trading, but we would also warn against the risks of futures and swaps trading. The crypto market is highly volatile, therefore the proper analysis is extremely crucial. Use these instruments carefully while investing in the crypto market.