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RE: Why I think Bitcoin Futures are the key to several major retailers accepting Bitcoin

in #bitcoin7 years ago

Future contracts are not only about speculation.
The main reason of an Future contract is to hedge risk.
And with BTC it works the same way with other commodities.

For an example, Oil are negotiated on an open market, and it is a product that have lots of uses.

An company like an airline that have to buy a huge amount of oil uses Future contracts to lock the price of the oil it is buying.

That way, no matter what will be the price of the Oil on the Future, the cost for the company is already defined, so it brings stability on the costs of operations.

The same can work on the future with BTC.

Retailers may acquire future contracts to protect themselves agains the price volatility of the BTC.

They mey acquire a 10 BTC future contract with an expiration date for 1 month, and that way, they can receive 10 BTC without worrying if the price will be higher or lower 1 month later.

Future contracts doesn't trade BTCs, but they add a way to counter the volatility.

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