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What is the difference between BTC perpetual contracts and USDT perpetual contracts?

The settlement currency in BTC perpetual contracts is Bitcoin (BTC), while in USDT perpetual contracts, it is Tether (USDT).

Oct 22, 2024 at 11:30 am

  1. Trading Pair: The underlying asset for trading in perpetual contracts. BTC perpetual contracts use Bitcoin (BTC) as the underlying asset, while USDT perpetual contracts use Tether (USDT) as the underlying asset.
  2. Settlement Currency: The currency used to settle the contract and reflect profit or loss. BTC perpetual contracts are settled in BTC, while USDT perpetual contracts are settled in USDT.
  3. Margin Requirements: The amount of funds you need to maintain a position in the contract. Margin requirements vary depending on the exchange and the contract specifications.
  4. Funding Rate: The periodic payments exchanged between long and short positions to maintain balanced leverage. Funding rates are typically paid every 8 hours in BTC perpetual contracts and USDT perpetual contracts.
  5. Price Index: The reference index for determining the price of the underlying asset. BTC perpetual contracts typically use a weighted average of spot prices from multiple exchanges, while USDT perpetual contracts may use a specific exchange's index.
  6. Liquidation Price: The price level at which your position will be forcibly closed to prevent significant losses. Liquidation prices are different for BTC and USDT perpetual contracts due to the difference in settlement currencies.
  7. Leverage: The ratio of borrowed funds used to amplify your trading position. Leverage levels offered for BTC and USDT perpetual contracts can vary depending on the exchange and risk parameters.

Example:

  • If you open a long position in a BTC perpetual contract, you would be speculating on the increase in the value of Bitcoin. If the price of Bitcoin rises, you would make a profit in BTC, which would be credited to your account.
  • If you open a short position in a USDT perpetual contract, you would be speculating on the decrease in the value of Tether. If the price of Tether falls, you would make a profit in USDT, which would be credited to your account.

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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!

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