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

币安人生

$0.3789

168.38%

Trade Now
COAI

$4.98

67.04%

Trade Now
CHEEMS

$0.0...01770

47.99%

Trade Now
QRL

$2.21

47.46%

Trade Now
AIA

$3.58

39.84%

Trade Now
USELESS

$0.3753

35.14%

Trade Now

Latest Crypto News

BlockDAG, DOGE, HYPE Sponsorship: Crypto Trends Shaping 2025
2025-10-01 00:25:13
Deutsche Börse and Circle: A StableCoin Adoption Powerhouse in Europe
2025-10-01 00:25:13
BlockDAG's Presale Buzz: Is It the Crypto to Watch in October 2025?
2025-10-01 00:30:13
Bitcoin, Crypto, and IQ: When Genius Meets Digital Gold?
2025-10-01 00:30:13
Stablecoins, American Innovation, and Wallet Tokens: The Next Frontier
2025-10-01 00:35:12
NBU, Coins, and Crypto in Ukraine: A New Yorker's Take
2025-10-01 00:45:14

Related knowledge

What is the difference between futures and perpetual contracts for Bitcoin?

Oct 02,2025 at 11:54pm

Understanding Bitcoin Futures Contracts1. Bitcoin futures are derivative instruments that allow traders to speculate on the future price of Bitcoin at...

What is the best time to trade PEPE contracts?

Oct 03,2025 at 11:54am

Understanding PEPE Contract Volatility1. PEPE contracts exhibit extreme price fluctuations due to their meme-based nature and low market cap. Trading ...

What are the common mistakes to avoid with Bitcoincoin contracts?

Oct 03,2025 at 08:54am

Emerging Trends in the Cryptocurrency Market1. Decentralized finance (DeFi) platforms continue to expand their influence across the blockchain ecosyst...

What is the maintenance margin for Bitcoin contracts?

Oct 02,2025 at 01:36am

Decentralized Exchanges Gain Momentum in 20241. Decentralized exchanges (DEXs) have seen a significant rise in trading volume, surpassing centralized ...

How to use technical analysis for trading XRP contracts?

Oct 03,2025 at 01:18pm

Understanding Price Patterns in XRP Futures1. Identifying chart patterns such as triangles, head and shoulders, and double tops or bottoms can provide...

What does "longing" PEPE contracts mean?

Oct 03,2025 at 11:54pm

Understanding Decentralized Exchanges in the Crypto Ecosystem1. Decentralized exchanges (DEXs) operate without a central authority, allowing users to ...