Derivative concept

In the context of cryptocurrencies and blockchain technology, the term “derivatives” refers to financial instruments based on digital assets such as Bitcoin, Ethereum, or other tokens.

Derivatives include various financial instruments such as futures, options, swaps, etc. They allow investors to protect their investments, reduce risk, and generate income based on cryptocurrency price fluctuations.

For example, Bitcoin futures allow investors to enter into contracts to buy or sell bitcoins in the future at a predetermined price. Such contracts help investors protect their positions against unexpected Bitcoin price fluctuations by allowing them to lock in a price in advance and avoid future losses.