Derivatives are one of the most used financial instruments by cryptocurrency traders who want to indirectly participate in the bitcoin market. Any financial instrument whose value is linked to another asset or basket of assets, known as the “underlying asset”, is called a derivative.
These products are very popular in the bitcoin and crypto markets because they allow you to access assets without having to purchase coins directly. Derivatives are the product of indirect influence. Investors do not need to buy bitcoins.
These are typical financial instruments of traditional capital that has reached bitcoin.
ETFs, futures, and leveraged tokens are some of the most popular derivatives. Like other products traded in financial markets, derivatives act as multilateral currency contracts that can be used for trading, exchange or settlement.
The main idea is that with this deal, the buyer can earn future income by changing the price of the underlying asset, and the seller receives commitments related to its trading.
For example, in the case of Bitcoin derivatives, the product will use the price of the cryptocurrency as a reference point to track in its own market, allowing investors to benefit from the movement of the asset. This way, investors can speculate on the price of a cryptocurrency without having to store funds directly in it.
The price of bitcoin that we often see in the CriptoNoticias and CoinMarketCap price calculators is the price at which the cryptocurrency is traded in the spot markets. In the case of derivatives, these products have their own market and although they imitate the spot market, their value may vary slightly.
This is because a derivative is itself a financial product and traders make a series of offers and claims on this product in the market, which affects its price. In this sense, each derivative has its own mechanism to maintain a certain parity with the underlying asset. Among the most famous derivatives in the cryptocurrency market are ETFs, cryptocurrency futures, and leveraged tokens.