Crypto futures trading has surged in popularity, offering opportunities in both bullish and bearish markets. Two primary futures contracts dominate this space: USDT-Margined (USDT-M) and Coin-Margined (COIN-M) futures. This guide explores their distinctions, benefits, and ideal use cases to help you optimize your trading approach.
What Are USDT-M Futures?
USDT-M futures are contracts margined and settled in USDT (Tether), a stablecoin pegged 1:1 to the USD. Traders use USDT as collateral, with profits/losses calculated in USDT.
Example: Trading the BTC/USDT pair requires funding your futures wallet with USDT. This setup appeals to traders prioritizing:
- Stability: USDT’s fixed value mitigates volatility risks.
- Lower Liquidation Risk: Stable collateral reduces exposure to wild price swings.
- Simplified Accounting: Profits/losses are easily tracked in USD equivalents.
👉 Start Trading USDT-M Futures
What Are COIN-M Futures?
COIN-M futures are margined and settled in the underlying cryptocurrency (e.g., BTC or ETH). Here, the asset itself acts as collateral.
Example: Trading BTC-COIN-M futures means holding BTC as margin. Gains/losses are realized in BTC, making this ideal for:
- Long-Term Hodlers: Profit from both futures and underlying asset appreciation.
- Bullish Traders: Capitalize on dual growth potential.
- Decentralization Advocates: Avoid stablecoin reliance.
Key Differences: USDT-M vs. COIN-M Futures
| Feature | USDT-M Futures | COIN-M Futures |
|---|---|---|
| Collateral | USDT (Stablecoin) | Underlying Crypto (e.g., BTC) |
| Settlement | USDT | Native Crypto |
| Margin Requirements | Lower (Stablecoin-backed) | Higher (Due to crypto volatility) |
| Risk Exposure | Futures contract performance only | Futures + Underlying asset volatility |
| Liquidity | Higher (Wider trading pairs) | Lower (Limited to major cryptos) |
Advantages of USDT-M Futures
- Stability: Hedge against crypto volatility with USDT.
- Accessibility: Trade hundreds of pairs with a single collateral type.
- Beginner-Friendly: Easier risk management and profit tracking.
Advantages of COIN-M Futures
- Asset Appreciation: Profit from both futures and rising crypto prices.
- No Stablecoin Dependency: Ideal for crypto purists.
- Tax Efficiency: Potential tax benefits in some jurisdictions.
How to Choose Between USDT-M and COIN-M
Opt for USDT-M If:
- You prefer stable collateral.
- You trade multiple assets or short-term strategies.
- Volatility concerns you.
Opt for COIN-M If:
- You’re bullish on a specific crypto.
- You want to accumulate the underlying asset.
- You’re comfortable with higher risk.
👉 Explore Futures Trading Today
Getting Started with USDT-M on Bitunix
- Create an Account: Complete KYC verification.
- Fund Your Wallet: Deposit USDT via supported networks.
- Navigate to Futures: Select the BTC/USDT pair.
- Trade: Execute long/short positions with USDT margin.
FAQ
Q1: Which futures type is better for beginners?
A1: USDT-M futures are simpler due to stablecoin collateral and lower volatility risks.
Q2: Can I switch between USDT-M and COIN-M futures?
A2: Yes, but assess your risk tolerance and market outlook before switching.
Q3: Do COIN-M futures offer higher leverage?
A3: Not necessarily—leverage depends on the exchange, but COIN-M often requires higher margin.
Q4: How does settlement work for COIN-M futures?
A4: Contracts are settled in the native crypto (e.g., BTC), so profits/losses fluctuate with its price.