USDT-Margined Futures vs. Coin-Margined Futures

What Are USDT-Margined Futures?

USDT-margined futures are futures contracts that use USDT as margin and settle PnL in USDT.

For example:

• Use USDT as margin

• Profits and losses are settled in USDT

Settlement in a stablecoin makes it easier for users to see exactly how much they've made or lost.

What Are Coin-Margined Futures?

Coin-margined futures are futures contracts that use the underlying digital asset (such as BTC or ETH) as margin, with PnL settled in the same asset.

For example:

• Use BTC as margin

• Profits and losses are settled in BTC

Coin holdings increase when trades are profitable and decrease when losses occur.

Key Differences

Key Features of USDT-Margined Futures

1. More Intuitive PnL Calculation

Since settlement is conducted in USDT, users can more easily understand their actual profits and losses.

For example:

• Profit of 100 USDT

• Loss of 50 USDT

Since PnL is settled in USDT, there's no need to convert your earnings before spending or withdrawing.

2. More Suitable for Beginner Traders

USDT-margined futures generally have a simpler trading structure:

• Stablecoins make fund management easier

• No need to hold the underlying digital asset to participate in trading

• Account value is relatively easier to track

This makes USDT-margined futures more suitable for beginner traders.

Key Features of Coin-Margined Futures

1. Suitable for Long-Term Holders

Coin-margined futures allow users to directly use their digital assets as margin without converting them into USDT.

For example:

• Users holding BTC can directly use BTC to participate in futures trading

• Profits may increase BTC holdings

2. Exposure to Underlying Asset Price Movements

With coin-margined futures, your PnL is settled in the underlying asset. This means your account value is affected not only by your trading results, but also by price movements in that asset.

For example:

• When BTC rises, the account value may increase

• When BTC falls, the account value may decline

As a result, account value volatility is generally higher.

How to Choose the Right Contract Type

Different contract types are suitable for different trading needs.

Generally:

• Beginner traders who prefer more intuitive PnL calculations may find USDT-margined futures more suitable

• Users who hold digital assets long-term and want to increase their coin holdings may prefer coin-margined futures

Users can choose the contract type that best suits their trading habits, risk preferences, and asset allocation needs.