What is the difference between perpetual futures contracts and traditional futures contracts in the cryptocurrency industry?

3 answers

• Dec 16, 2021 · 3 years ago
  Perpetual futures contracts and traditional futures contracts are both financial instruments used in the cryptocurrency industry, but they have some key differences. Perpetual futures contracts are designed to mimic the trading experience of spot markets, allowing traders to hold positions indefinitely without an expiration date. On the other hand, traditional futures contracts have a fixed expiration date and require physical or cash settlement. Perpetual futures contracts also use a funding mechanism to maintain price parity with the underlying asset, while traditional futures contracts rely on the forces of supply and demand to determine their price. Overall, perpetual futures contracts offer more flexibility and liquidity, but they also carry the risk of funding costs and potential market manipulation. Traditional futures contracts, on the other hand, provide a more structured and regulated trading environment, but they may lack the same level of liquidity and flexibility.
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• Dec 16, 2021 · 3 years ago
  Perpetual futures contracts and traditional futures contracts are like two different animals in the cryptocurrency industry. Perpetual futures contracts are more like a wild stallion, allowing traders to ride the market without any expiration date. They offer the freedom to enter and exit positions at any time, providing a more flexible trading experience. On the other hand, traditional futures contracts are more like a tamed horse, with a fixed expiration date and specific settlement requirements. They provide a more structured and regulated trading environment, but they may not offer the same level of flexibility. So, if you're a risk-taker who loves the thrill of the market, perpetual futures contracts might be your best bet. But if you prefer a more predictable and regulated trading experience, traditional futures contracts could be the way to go.
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• Dec 16, 2021 · 3 years ago
  Perpetual futures contracts and traditional futures contracts are two different types of financial instruments used in the cryptocurrency industry. Perpetual futures contracts, like the ones offered by BYDFi, are designed to provide traders with a continuous trading experience without any expiration date. They use a funding mechanism to maintain price parity with the underlying asset, allowing traders to hold positions indefinitely. On the other hand, traditional futures contracts have a fixed expiration date and require physical or cash settlement. They are more commonly offered by established exchanges like Binance. While perpetual futures contracts offer more flexibility and liquidity, traditional futures contracts provide a more structured and regulated trading environment. Both types of contracts have their own advantages and disadvantages, so it's important for traders to understand their differences and choose the one that aligns with their trading strategy and risk tolerance.
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