As someone who has been in the cryptocurrency space for many years, I've seen too many people treat futures contracts as a shortcut to 'get rich overnight', only to find themselves on the 'fast track to poverty' instead. Today, I will use the simplest language to help you unveil the mysterious veil of Bitcoin futures.
1. The essence of futures: a 'bet' on the future.
In simple terms, Bitcoin futures are a 'future trading contract' you sign with a counterparty.
For example, if the current Bitcoin price is $100,000 and you believe it will rise to $120,000 in three months. So you find someone to agree: 'Buddy, no matter what the market price is in three months, you will sell me 1 Bitcoin for $120,000.'
If Bitcoin really rises to $130,000 in three months, you can still buy at $120,000, netting a profit of $10,000. But if the price falls to $90,000, sorry, you still have to buy at the 'contract price' of $120,000, instantly losing $30,000.
The key point is that this contract is standardized, and the exchange has already specified the contract size, delivery date, etc. You only need to decide whether to be 'bullish' (long) or 'bearish' (short).
2. Leverage: A sharp 'double-edged sword'
The most attractive aspect of futures is leverage, allowing you to control large positions with a small amount of capital.
For example, if you use 10x leverage, you only need $10,000 in margin to operate a Bitcoin worth $100,000. If the price rises by 10%, your principal doubles; but if it drops by 10%, your margin goes to zero.
High returns inevitably come with high risks. A 2% margin (i.e., 50x leverage) means that if the price moves against you by just 2%, your margin will incur a 100% loss. This is why I strongly advise beginners not to exceed 5x leverage; otherwise, a single fluctuation could wipe you out.
3. The 'scissors gap' between futures and spot prices
You will certainly notice: why do futures prices and spot prices always differ?
This is actually a barometer of market sentiment:
Futures premium (contango): Futures price > Spot price, indicating that people are generally optimistic about the future
Futures discount: Futures price < Spot price, reflecting the market's pessimism about the future
This price difference can also create arbitrage opportunities, and savvy traders will operate in both markets simultaneously to earn risk-free profits.
4. The Three Survival Rules for Futures Traders
① Stop-loss is the first lifeline
I have seen too many people blow up their accounts because of 'holding onto positions.' A stop-loss must be set at the same time as opening a position; this is a hard rule. My habit is: a single loss should never exceed 2% of total capital.
② Beware of the 'Double Kill' market
When the market is in a consolidation period, futures contracts often experience extreme 'Double Kill' conditions. In this situation, both long and short positions may be forcibly liquidated due to drastic price fluctuations.
③ The funding fee for perpetual contracts is a hidden cost
If you are trading perpetual contracts (which have no expiration date), a funding fee is charged every 8 hours. This mechanism is designed to keep the contract price close to the spot price. When the rate is positive, shorts pay longs, and when negative, longs pay shorts. Long-term positions must account for this cost.
5. My practical insights: The true value of futures is not speculation
After years of trial and error, I have found that the greatest value of futures is not gambling, but two more important functions:
✅ Hedging risk (insurance for miners and long-term holders)
If you are a Bitcoin miner or long-term investor, you can lock in profits using futures. For example, if the cost of the coins you mined is $80,000, and the current price is $100,000, yet you are worried about a downturn. At this point, you can open a short position equivalent to that amount, so even if the coin price drops to $90,000, your profits from futures can offset the losses in the spot market.
✅ Capture cross-market arbitrage opportunities
When the price difference between futures and spot is too large, you can conduct two trades in opposite directions simultaneously. For example, buying in the spot market and selling in the futures market to earn stable price difference profits. This strategy has lower risk and is suitable for conservative players.
Finally, a couple of words
The tool of Bitcoin futures itself is neither good nor bad; the key lies in the users. It can be a shield for risk management or a bomb for wealth destruction.
My advice is: beginners should only use a demo account for the first three months, and after familiarizing themselves with the power of leverage, then use real money. Remember, in this market, surviving is more important than making quick money.
(Note: The above are personal practical insights and do not constitute any investment advice. Contract risks are extremely high; proceed with caution.)
Follow me@币圈罗盘 , next time I will take you through the underlying logic of contract strategies, helping you avoid detours and earn real money!#加密市场观察 $BTC $ETH
