Since Bitcoin futures were first launched in the futures market in 2017, trading volume has surged, and the futures market has overwhelmed the spot market. As of March 2024, futures and options trading volume linked to cryptocurrencies on centralized exchanges had increased 86.5% to an all-time high of $6.18 trillion, three times the total market capitalization of all cryptocurrencies. Mind Tree invests in cryptocurrency derivatives (futures, options) using the Generative AI Trading System (GATS). Mind Tree has developed the world’s first deep learning-generated AI cryptocurrency futures and options automatic trading system. To understand Mind Tree’s GATS, you need to understand the Bitcoin futures market.
The Bitcoin futures market allows investors and traders to speculate on the future price movements of Bitcoin without needing to own the actual cryptocurrency. Bitcoin futures are financial contracts that obligate the buyer to purchase Bitcoin (in the case of a long position) or the seller to sell Bitcoin (in the case of a short position) at a predetermined price and date in the future. These contracts are standardized and traded on futures exchanges, such as the Chicago Mercantile Exchange (CME) or the Intercontinental Exchange (ICE).
Each Bitcoin futures contract specifies the quantity of Bitcoin (often 1 BTC per contract), the expiration date (monthly contracts are common), and the price at which the transaction will occur. If a trader expects the price of Bitcoin to rise, they can go long (buy) futures contracts. If the price increases by the contract expiration, the trader profits by buying Bitcoin at a lower futures price. Conversely, if a trader expects the price of Bitcoin to fall, they can go short (sell) futures contracts. If the price decreases by the contract expiration, the trader profits by selling Bitcoin at a higher futures price.
Futures contracts allow traders to leverage their positions, meaning they can control a larger position with a smaller amount of capital. However, leverage magnifies both gains and losses, making futures trading a high-risk endeavor. Traders often use crypto trading signals to make informed decisions and improve their chances of predicting price movements accurately. Futures markets contribute to price discovery by providing a platform for traders to express their expectations about future Bitcoin prices.
The Bitcoin futures market can influence the spot (current) market. For instance, significant trading volume and positions in futures can affect market sentiment and potentially lead to price movements in the underlying Bitcoin market. Bitcoin is known for its price volatility, which can lead to significant gains or losses in futures trading.
Overall, Bitcoin futures trading provides various benefits, including risk management tools, leverage opportunities, price transparency, market access for institutional investors, portfolio diversification, arbitrage possibilities, and a regulated trading environment. These advantages make Bitcoin futures an essential component of the broader cryptocurrency ecosystem, appealing to both speculators and risk-averse investors alike.
Mind Tree uses the Generative AI Trading System (GATS) to invest directly in cryptocurrency derivatives such as Bitcoin, Ethereum, Ripple, etc. on the Chicago Mercantile Exchange (CME) and Binance exchange. Mind Tree’s GATS is the world’s first deep learning generative artificial intelligence trading system. It is different from trading bots that automatically execute transactions according to already defined rules and strategies used in existing cryptocurrency futures and options trading. GATS responds in real time to frequently changing situations in the financial futures market and makes complex decisions. It learns financial transaction big data to create new rules and strategies tailored to market conditions.
