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the cash settled futures market is more like you betting your neighbor $100 that the price of BTC will rise by a certain date. the futures exchange acts as the
by solotronics 9y ago
the cash settled futures market is more like you betting your neighbor $100 that the price of BTC will rise by a certain date. the futures exchange acts as the bookie and just exists to track the BTC price on the crypo exchanges and settle the futures contracts ( bets ).
- kgwgk 9y agoBut the bet is open to anyone and, as the parent said, if the future is much cheaper than the real thing the people who want to get exposure may use the future (removing demand from BTC) and if the future is much more expensive arbitrageurs will sell futures and buy BTC at the same time (adding demand).