Crypto Spot market vs. Futures market: The key differences
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In general, a spot market is where the commodities are traded on the spot with immediate delivery. While a futures market, as the name suggests, settles the delivery of commodities and futures contracts on a specific future date.
Spot and futures markets are terms used in the financial market, like stocks or forex. But did you know they’re also the fundamentals to shape the crypto market?
Crypto market has had its fair share of ups and downs, in particular, the significant plunge of Bitcoin (BTC) prices from the neighborhood of $20,000 to $3,000 after the rally in 2017. Then goes the ever-changing regulations towards the adoption of Bitcoin. Until the recent BTC’s bull that sky-rocketed to its all-time high around $61,000. That is still shocking to the majority of Bitcoin spot and futures market traders.
So why is understanding the difference between spot trading and futures trading so important?
Let’s find out!