What is the difference between cash market and future market in the context of cryptocurrencies?

3 answers

• Dec 30, 2021 · 3 years ago
  In the context of cryptocurrencies, the cash market refers to the spot market where digital assets are bought and sold for immediate delivery. It involves the direct exchange of cryptocurrencies for fiat currencies or other cryptocurrencies. The cash market is characterized by instant settlement and is commonly used for short-term transactions or immediate needs. On the other hand, the future market in cryptocurrencies involves trading contracts that represent an agreement to buy or sell a specific cryptocurrency at a predetermined price and date in the future. Unlike the cash market, the future market allows traders to speculate on the price movement of cryptocurrencies without actually owning the underlying assets. Future contracts are settled at a later date, which introduces additional risk and complexity compared to the cash market.
  849425
• Dec 30, 2021 · 3 years ago
  Alright, let's break it down. The cash market in cryptocurrencies is like buying and selling digital assets for immediate delivery. It's like going to a store and paying with cash. You get the goods right away, no waiting. The future market, on the other hand, is more like making a reservation for a product that will be delivered at a later date. You agree to buy or sell a specific cryptocurrency at a predetermined price and time in the future. It's like booking a hotel room in advance. The future market allows traders to speculate on the price of cryptocurrencies without actually owning them, which can be a bit risky. So, in a nutshell, cash market is for immediate transactions, while future market is for future delivery and speculation.
  748250
• Dec 30, 2021 · 3 years ago
  When it comes to cryptocurrencies, the cash market and the future market offer different trading options. In the cash market, you can buy or sell cryptocurrencies for immediate delivery. It's like buying a pizza and eating it right away. On the other hand, the future market allows you to enter into contracts to buy or sell cryptocurrencies at a future date and a predetermined price. It's like ordering a pizza for delivery tomorrow. The future market introduces the element of speculation, as you can profit from the price movements of cryptocurrencies without actually owning them. However, it also comes with additional risks, such as the possibility of contract settlement issues. So, it's important to understand the differences between these two markets and choose the one that aligns with your trading goals and risk tolerance.
  836209