What Are Crypto Futures? A Beginner's Guide For Traditional Market Traders
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Unlike traditional markets that operate within fixed hours and close on weekends, crypto markets run 24/7.
Authored by Paras Malhotra. Head – Trade, Custody and Business Operations at CoinDCX: As the crypto market continues to evolve and mature, Futures trading has emerged as a key instrument for market participants looking to capitalise on price volatility and effectively hedge their positions. Crypto Futures are derivative contracts designed to mirror the price movements of the underlying digital asset. These instruments offer the strategic benefits typically associated with traditional futures markets—such as leverage, risk management, and short-selling opportunities—while maintaining the flexibility of crypto-native infrastructure.
Consider this example: An investor with $100 in trading capital is optimistic about Bitcoin's price trajectory. They initiate a long position on a BTC/USDT Futures contract using 10x leverage. This enables them to gain exposure to a $1,000 position—comprising $100 of their own capital and $900 borrowed from the exchange. This use of leverage amplifies both potential gains and risks, making position management a critical aspect of Futures trading.
Bitcoin Futures, in particular, have gained significant traction due to their high liquidity and strong institutional interest. As this segment matures, understanding technical tools such as chart patterns becomes essential for informed decision-making and effective risk management.
Why are equity investors interested?
In India, the crypto derivatives market is seeing growing interest from equity market participants—especially those already familiar with Futures and Options trading in traditional finance. This signals a broader shift, where experienced traders are increasingly exploring crypto as a parallel avenue for diversification and strategic trading. Crypto futures mirror many features of equity futures and options: the ability to take long or short positions, hedge existing stakes, and employ leverage. This familiarity has spurred strong interest from those already navigating the equity derivatives space.
Crypto Futures operate within a market structure where every contract requires a counterparty—mirroring the zero-sum nature of derivatives. For every participant going long, another must be willing to take the opposite view and go short. Once both sides are matched, the contract is created and introduced into the market. While this structure is similar to traditional derivatives markets, a key differentiator in crypto is the concept of perpetual contracts—Futures contracts without a fixed expiry date—enabling traders to hold positions indefinitely, subject to funding rates and margin requirements. This model offers greater flexibility and has become one of the key reasons why crypto futures appeal to modern traders.
For equity derivatives traders used to strict expiry cycles and rollover costs, perpetual futures offer a more agile way to express directional views or hedge portfolios.
While leverage still introduces risk, many traders find that the ability to manage positions dynamically — without worrying about expiry — allows for better control and potentially lower downside than high-volatility equity swings, especially in intraday setups.
Around-the-Clock Opportunity
Unlike traditional markets that operate within fixed hours and close on weekends, crypto markets run 24/7. This continuous access allows equity traders to explore opportunities even after traditional markets shut down — offering flexibility, extended exposure, and the ability to act on global events in real-time.
Introduction of INR margining
Traders can use Indian Rupees directly as collateral to trade pairs like BTC-USDT or ETH-USDT. This removes the earlier requirement to convert INR into stablecoins, simplifying the process.
Leverage amplifies both gains and losses. Indian exchanges now offer everything from 1x for cautious strategies to 100x for high-octane scalping. This versatility supports approaches ranging from quick momentum trades to longer-term directional bets. Yet it also demands disciplined risk controls—position sizing, stop losses, and portfolio diversification are essential for sustainable success.
Institutional Momentum Strengthens the Case
Institutional adoption is reshaping the crypto market's credibility and liquidity. In Q1 2025, public firms added a record 95,000 BTC to their treasuries, with 79 corporations—including those outside the traditional finance sector—now holding Bitcoin. This institutional wave underscores Bitcoin's role as a strategic reserve rather than a mere speculative tool. As these trends play out globally, they reinforce confidence among Indian retail and professional traders considering crypto derivatives.
It is authored by Paras Malhotra. Head – Trade, Custody and Business Operations at CoinDCX
The views expressed in this article are those of the author and do not represent the stand of this publication.
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First Published:
May 20, 2025, 12:00 IST
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