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How do non-deliverable forwards differ from traditional cryptocurrency trading?

avatarRaviraj ParabDec 26, 2021 · 3 years ago1 answers

What are the differences between non-deliverable forwards and traditional cryptocurrency trading?

How do non-deliverable forwards differ from traditional cryptocurrency trading?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    Non-deliverable forwards (NDFs) and traditional cryptocurrency trading have distinct differences. NDFs are financial contracts that allow investors to speculate on the future exchange rate of a currency, without actually owning the currency. On the other hand, traditional cryptocurrency trading involves buying and selling actual cryptocurrencies on a digital exchange. NDFs are settled in cash, while traditional cryptocurrency trading involves the transfer of cryptocurrencies between wallets. Additionally, NDFs are typically traded over-the-counter (OTC), while traditional cryptocurrency trading takes place on centralized exchanges. These differences in structure and execution make NDFs and traditional cryptocurrency trading unique in their own ways.