The cryptocurrency boom in 2021 created a world of opportunity, but that opportunity wasn’t necessarily equally accessible to everyone.
To purchase a share of Alphabet Inc. (NASDAQ: NASDAQ:GOOGL) or Apple Inc. (NASDAQ: NASDAQ:AAPL), you had to fork over between $182 (for Apple) and $3,000 (for Alphabet). The price of a single Bitcoin (CRYPTO: BTC), meanwhile, had reached $69,000.
As a result, many reportedly could not capitalize on the coins’ price ascensions. For those who did, only a small percentage may have had the leverage necessary to capitalize on the opportunity fully.
Key operators like Cboe Global Markets Inc. (BATS: CBOE) and Coinbase (NASDAQ:COIN) Global Inc. (NASDAQ: COIN) have been introducing products to attempt to provide more tools for traders at every level. As a modern futures trading platform, Tradovate says it is providing a way for crypto investors and traders to capitalize on these new releases.
In its latest release, Tradovate introduced the world to Coinbase Nano Bitcoin Futures (NBFs), which are reportedly the market’s most affordable method to trade Bitcoin futures with leverage. With NBFs, traders can make use of the volatility of the cryptocurrency market for a price as low as 5 cents a contract.
Issues In Crypto Currency Trading One need only look toward Luna’s collapse, Celsius’s decision to withhold withdrawals and the presence of fake cryptocurrency exchanges like BitKRX to see some pitfalls the crypto community faces. In a market with some unregulated instruments and exchanges, traders often report looking for venues they can trust for their trading activities.
Additionally, access to flexible speculation and hedging vehicles is seemingly hard to come by on the crypto scene. For the longest time, finding instruments to short — or bet against — cryptocurrency price movements was a grueling task for traders, forcing them to opt for stock market proxies like Marathon Digital Holdings Inc. (NASDAQ: MARA) or the newly released Horizon’s BetaPro Inverse Bitcoin ETF (TSX: BITI).
When options and futures were found, some were relatively unregulated exchanges and proposed a level of leverage that made it nearly impossible to manage risk. One cryptocurrency exchange famously offered 150 times leverage on futures, leaving many regulators concerned for the well-being of novice traders.
Reasons To Trade Nano Bitcoin Futures? Tradovate hopes that NBFs address many of the major concerns in the cryptocurrency market.
At 1/100th the price of a Bitcoin, NBFs are meant to drastically reduce the price needed to trade Bitcoin while providing traders with the leverage needed to maximize their trading potential. Keep in mind that while leverage can provide more buying power, it also increases risk.
Additionally, because they’re listed on Coinbase, a company listed on the Nasdaq Capital Markets, regulations are far more stringent on these instruments. Therefore, they’re reported and regarded as safer alternatives to options and futures contracts one may find on other unregulated exchanges.
Another added benefit to NBFs is that they allow traders to bet on movements in both directions. In the throes of a bear market and a price drop of over 70% for Bitcoin, NBFs could allow traders to leverage downside volatility and investors to hedge against their long-term positions for safety.
As a bonus, Tradovate says it has further improved the affordability of NBFs by cutting commission, market data, subscription and inactivity fees. This affordability is paired with the benefits of futures trading, including extended trading hours, cash-settled contracts and the benefits mentioned above.
NBFs are monthly contracts that are listed for the two nearest months. With them, Tradovate reports that retail traders can, for once, leverage their capital like the pros and do so in a highly regulated and safe environment.
Click here to learn more about optimizing trading with NBFs.
Trading virtual currency derivatives have a variety of unique and potentially significant risks. Please read our full Virtual Currency Transaction Disclosures & Risk Disclosure Statement for Virtual Currency Futures prior to any virtual currency trading.
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