Understanding the expiry date of the fouls and its impact on cryptocurrency prices
In the world of cryptocurrency, future contractual markets have become an important actor in prices. One of the main components of these future contracts is the expiry date, which can significantly affect the value of cryptocurrency, such as Bitcoin (BTC) and Ethereum (ETH). In this article, we will deepen the codoppheses at the end of the expiry date, influencing cryptocurrency prices and giving a vision of investors.
What are future contracts?
The future agreement is a binding contract for the purchase or sale of activities at a predetermined price in the future. In the context of cryptocurrencies, the Furer agreements usually include the exchange of monetary liquidation (known as «cash regulation») in exchange for the supply of certain amounts from the underlying cryptocurrency.
Future expiration date
When it comes to cryptocurrencies such as Bitcoin Ethereum, the expiry date concerns the point where the contract becomes useless. This usually happens after one year from the expiry of the contract. There are two types of future contracts:
Money Settles in which no delivery is involved and
Delivery in which the investor should physically receive money.
Impact on Cryptocurrency Prices
Future cryptocurrency contracts could have a significant impact on prices:
1
Nutrition : When the future agreement expires useless, it becomes a «zero non -profit» contract, with consequent increase in volatility on the market. This is because investors are not forced to sell or buy at a predetermined price, causing the price quickly floating.
2 For example, if the Bitcoin contract expires useless on April 15, it is possible that the market will have a strong decline (or «peak») after May 16, followed by a rebound.
3
Mercato reaction : If announced to the future agreement, it can cause a response to the market in both directions. This may include sales of pressure if investors expect prices to decrease or acquire pressure if they expect prices to increase.
Factors that influence the expiry date of the fouls
Several factors can affect the end of the future contracts of the cryptocurrency:
1
MARKING MOOD
: The mood of investors and market expectations play an important role in determining the probability of expiry.
- The size of the agreement : the size of the contract determines the potential impact on prices, the greater the more volatile contracts than smaller.
3
Despite date : the agreements established for specific dates can be influenced by factors such as holidays, economic events or regulatory changes.
Example: Future Bitcoin Petura Date
In order to illustrate the effects of the fouls on the expiry date on the prices of the cryptocurrency, we consider an example:
In April 2020, Bitcoin’s future contracts expired on May 7th. If the Bitcoin price had remained stable at around $ 10,000 at that moment, it would not be necessary to pay or deliver money. As a result, investors would not have been exposed to additional costs or risks.
However, as the expiration date approaches and the prices started to drop below $ 6,000 (average of 50 days of change), market mood became the beard and price of bitcoin fell from $ 10,500 to $ 3600. The sudden loss of value on May 7, which investors did not expect, caused a rapid increase in volatility.
Conclusion
In conclusion, the term of future contracts is a critical factor that can significantly influence the prices of the cryptocurrency. Understanding how these contracts end and the factors that influence them are essential for investors who want to surf the cryptocurrency market in the difficult world.