How the price of BTC Futures Contracts is determined?

Litecoin, which is the base cryptocurrency of the United Kingdom, is expected to experience an average increase in its price to $82.68. All cryptocurrency analysts believe that Litecoin has the most optimistic projections, saying that its price might increase as high as 1,500 USD by the end of 2020. On the other hand, some platforms are of the opinion that the cryptocurrency will experience only moderate growth in its price.

Complete details of the Litecoin futures are listed on all major crypto exchanges. Litecoin, which is a peer-to-peer cryptocurrency, allows a near-instant and low-price money transfers. Creation, as well as the transfer of the cryptocurrency, is decentralized. It is based on an open-source cryptographic procedure. As the Litecoin blockchain was established in October 2011 as a hard-fork of the Bitcoin block, its protocol is almost the same as the protocol of Bitcoin.

However, the key differences between the Litecoin futures contract and the Bitcoin futures contract include:

·    Blocktime in Litecoin blockchain is approximately 2.5 minutes as against 10 minutes for BTC Futures Contracts.

·         While the supply of Bitcoin is limited to 21 million, the maximum supply of Litecoins is 84 million.

·         While the Bitcoin blockchain makes use of SHA-256 as the hashing algorithm, Litecoin uses scrypt as its hashing algorithm. This option of hashing algorithm makes miners easy to mine Litecoin by making use of any user-grade hardware.

Traders can buy and sell their Litecoins directly, which is known as LTC spot trading. They can make a huge profit by buying LTC at a low price and sell it at a higher price. However, the trading loss can be easily resolved through the LTC margin trading by making use of derivatives. This is for the reason that derivatives are capable of addressing these shortcomings easily and effectively.

The Litecoin futures contracts allow you to get the required benefits, irrespective of the increasing or decreasing price of LTC.  Additionally, these derivative contracts feature incorporated leverage, enabling traders to operate big contracts with a small investment.

The price of the BTC Futures Contracts will be affected if they have less expiry date. This means that if the expiry day is low, such as 2 days, the price calculation formula of these contracts will just tell you that the price of the futures contract will remain extremely close to the spot price of the cryptocurrency, as there are only 2 days for its price expiry. However, because of high instability, the spot price of the bitcoin cryptocurrency may increase or decrease within hours considerably. 

All futures contracts get their value from their individual underlying cryptocurrency, so BTC Futures Contracts are no exception. When it comes to the bitcoin futures, their prices mainly count on the spot prices of bitcoin. This means that if there is a change in the price of bitcoin, the change will reflect in the price of the BTC futures contracts. This dependence shows the way to the prices of the two moving in synchronization with each other, although there is a disparity between the two.