What is the difference between Bitcoin leveraged trading and perpetual contract trading?

Perpetual contracts offer higher leverage ratios, but they are considered more speculative and volatile than leveraged trading, where traders trade physical Bitcoin assets.

Oct 23, 2024 at 09:12 am

Difference Between Bitcoin Leveraged Trading and Perpetual Contract Trading

Trading Instrument

Leveraged Trading: Trades physical Bitcoin (BTC) assets using leverage.
Perpetual Contract Trading: Trades a futures contract that tracks the price of BTC but does not result in physical asset delivery.

Settlement

Leveraged Trading: Transactions are settled in the underlying asset (BTC) at the end of the trading period or when the position is closed.
Perpetual Contract Trading: Contracts have no predefined settlement date and can be held indefinitely. Settlements occur at the contract price when positions are closed.

Collateral

Leveraged Trading: Requires traders to post margin in the form of BTC or a stablecoin.
Perpetual Contract Trading: Also requires margin, but typically in stablecoins or a basket of assets.

Leverage

Leveraged Trading: Leverage ratios vary depending on the trading platform, typically ranging from 2x to 100x.
Perpetual Contract Trading: Leverage ratios are generally higher, reaching up to 125x or even more.

Risk

Leveraged Trading: Higher leverage increases potential profits but also carries greater risk of significant losses.
Perpetual Contract Trading: While offering a wider range of leverage options, perpetual contracts are generally considered more speculative and volatile.

Funding Rate

Leveraged Trading: No funding rate applies.
Perpetual Contract Trading: A funding rate is paid or received on a regular basis (typically every 8 hours) to align the contract price with the spot price of BTC.

Key Differences Summary

Feature	Leveraged Trading	Perpetual Contract Trading
Trading Instrument	Physical Bitcoin (BTC)	Futures contract
Settlement	Underlying asset	Contract price
Collateral	BTC or stablecoin	Stablecoin or asset basket
Leverage	Typically 2x to 100x	Up to 125x or more
Risk	High with increased leverage	Speculative and volatile
Funding Rate	Not applicable	Paid or received regularly

Disclaimer:info@kdj.com

The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research！

If you believe that the content used on this website infringes your copyright, please contact us immediately (info@kdj.com) and we will delete it promptly.

Fear & Greed Index

Trade Now

Biggest Gainers

PANDA

$0.6804

93204.58%

Trade Now
WZRD

$5.9

1334.56%

Trade Now
OMIKAMI

$0.07366

240.07%

Trade Now
DIA

$0.9053

80.99%

Trade Now
CFX

$0.2284

55.09%

Trade Now
DRIFT

$0.7266

44.87%

Trade Now

Latest Crypto News

Toshi.bet: Leading the Crypto Casino Revolution in Poland 2025
2025-07-21 20:30:12
Tether Gold (XAU₮) Expands: Mobee Indonesia & Tokenized Gold's Rising Tide
2025-07-21 20:50:12
BlockDAG's Launch Access: No Vesting, Maximum Opportunity!
2025-07-21 21:30:12
Altcoin Season Heats Up: Cardano Outperforms After Bitcoin Stabilizes
2025-07-21 20:50:12
BlockchainFX: The 1000X Potential Crypto SHIB and DOGE Holders Are Eyeing
2025-07-21 21:30:12
Delhi High Court and the Curious Case of the Missing ₹50 Coin
2025-07-21 21:35:13

Related knowledge

What is a maker vs a taker fee?

Jul 19,2025 at 01:14am

Understanding the Basics of Cryptocurrency Exchange FeesIn the world of cryptocurrency trading, maker vs taker fees are a fundamental concept that eve...

How to analyze Bitcoin futures data from CME?

Jul 19,2025 at 05:22pm

Understanding Bitcoin Futures on CMEBitcoin futures on the CME Group (Chicago Mercantile Exchange) represent a regulated financial instrument that all...

Advanced order types for Bitcoin contracts

Jul 21,2025 at 01:14pm

Understanding Advanced Order Types in Bitcoin ContractsIn the world of Bitcoin futures trading, advanced order types play a crucial role in managing r...

Common mistakes in crypto futures trading

Jul 20,2025 at 09:56pm

Overleveraging Without Risk ManagementOne of the most common mistakes in crypto futures trading is overleveraging. Traders often believe that using hi...

How to understand the liquidation price?

Jul 19,2025 at 10:00pm

What Is a Liquidation Price in Cryptocurrency Trading?In the realm of cryptocurrency futures and margin trading, the liquidation price refers to the s...

What is the maximum leverage for Bitcoin futures?

Jul 20,2025 at 03:42pm

Understanding Leverage in Bitcoin FuturesLeverage in Bitcoin futures refers to the use of borrowed capital to increase the potential return on investm...