A forward contract is a personalized agreement between two parties to buy or sell an asset at a predetermined price on a specific future date. In the case of cryptocurrencies, this contract typically involves digital currencies like Bitcoin or Ethereum.One party agrees to sell a certain amount of cryptocurrency at a set price, while the other party agrees to buy it. This arrangement allows both parties to hedge against price fluctuations. For example, if a trader believes the price of a cryptocurrency will rise in the future, they might enter into a forward contract to lock in the current price.Forward contracts are not traded on exchanges but are instead negotiated directly between the parties involved. This means they can be tailored to meet specific needs, such as the quantity of cryptocurrency and the settlement date.However, they carry risks, especially related to counterparty default. If one party is unable to fulfill their part of the agreement, the other may not receive the expected benefits.