There are several leading Bitcoin trading platforms, such as Deribit, that are not available to American investors due to regulatory compliance issues. These derivatives are based on pricing; fluctuations in the cryptocurrency’s price have a domino effect on investor gains and losses. If you buy a futures contract, you are betting that the price of the security will rise; this ensures that you can get a good deal on it later. If you sell a futures contract, it suggests a bearish mindset and a prediction that Bitcoin will decline in price.

This creates buying pressure, which can drive the price up even further, leading to even more short sellers covering their positions and causing a rapid price increase.