Leading crypto spot market exchange Binance has launched a new Bitcoin futures product to complement its already growing derivatives products in place since last year.
Announced on Thursday, the BTCUSD futures are an addition to the similarly specced BTCUSD perpetual futures with no expiration date. The quarterly futures, however, will expire the last Friday of the quarter and settle in physical bitcoin.
Worth mentioning is that the quarterly futures will also have a leverage counter running to as high as 125x similar to the already running perpetual futures contracts. The first quarterly BTCUSD contract is already live on Binance with an expected expiry date in September 2020.
“As part of this launch, users will receive 30 days of maker fee rebates and enjoy as low as 0.020% in taker fees when trading on the BTCUSD Quarterly Futures Contract from 2020/06/11 08:00 AM (UTC) to 2020/07/10 08:00 AM (UTC),” Binance announced in its press release.
Speaking to business news media Bloomberg during an interview, Binance’s CEO Changpeng Zhao said that market demand advised the launch of the quarterly futures.
“We have the perpetual futures, so we wanted to go from longer-term to shorter,” Zhao told Bloomberg. “We have a lot of users who trade futures on other platforms with delivery futures, and they are asking us to launch delivery futures so they can trade in one place. We launch products relative to user demand.”
Zhao also mentioned that there are plans to add to the quarterly futures product other futures derivatives with even shorter expiry periods such as weekly and monthly. This will depend on the reception of the quarterly BTCUSD futures.
Crypto futures (similar to traditional assets) are derivatives that allow traders to bet on the future of the price action of a given asset (in this case Bitcoin.) Bulls will go long meaning that they will predict a future price higher than the current price while bears will go short meaning they expect the privet to fall in the future.
Leverage allows traders to significantly multiply a bet thereby increasing the potential of making bigger returns. However, it also multiplies the risk involved in making losses in-case the trade goes the other way.
Zhao, in his interview, said that he anticipates the price of bitcoin to rise despite intermittent value fluctuations. “The price does fluctuate but if you look at a longer-term horizon, Bitcoin will keep value pretty well.”
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