KuCoin coin-margined vs USDT-margined futures

Coin-margined futures use the same crypto as collateral and PnL, ideal for long-term holders, while USDT-margined offers stablecoin simplicity, better for short-term traders.

Jul 24, 2025 at 01:49 am

Understanding Coin-Margined Futures

Coin-margined futures on KuCoin require traders to post collateral in the same cryptocurrency that underlies the contract. For example, if you trade a BTC/USDT perpetual contract with coin-margined leverage, your margin must be in BTC. This means your profit and loss (PnL) are also denominated in BTC. This structure appeals to long-term holders who want to avoid converting their crypto assets into stablecoins. When the price of BTC moves, both the value of your position and your margin shift in BTC terms — making it essential to monitor your liquidation price closely, as volatility in the underlying coin can amplify risk.

How USDT-Margined Futures Work

USDT-margined futures allow traders to use USDT (Tether) as the sole collateral for any futures contract, regardless of the underlying asset. If you open a BTC/USDT perpetual contract using USDT margin, your PnL is calculated and settled in USDT. This setup simplifies risk management because your exposure to the underlying asset’s price fluctuations doesn’t affect your margin value directly. For instance, if ETH drops sharply but your margin is in USDT, your account equity remains stable in dollar terms — unless your position itself incurs losses. This makes USDT-margined contracts more intuitive for beginners and those focused on stablecoin-based trading strategies.

Key Differences in Liquidation Mechanics

• Coin-margined contracts adjust liquidation prices based on the underlying asset’s volatility. If BTC’s price surges or crashes, your margin (in BTC) changes in real-time, which can trigger liquidation faster than expected.
• USDT-margined contracts calculate liquidation purely based on USDT value. Even if BTC price fluctuates wildly, your margin remains fixed in USDT, so liquidation depends only on your position’s USDT-denominated loss.
• Traders must set up stop-loss orders in the correct currency — for coin-margined, stop-losses are in BTC; for USDT-margined, they’re in USDT. Misalignment here can lead to unexpected outcomes during high volatility.
  

  Step-by-Step: Opening a Coin-Margined Position

• Log into your KuCoin Futures account and select “Coin-Margined” from the trading interface.
• Choose a contract like BTCUSDTPERP and ensure your wallet holds sufficient BTC as margin.
• Set leverage using the slider (e.g., 10x). Note that higher leverage increases liquidation risk due to BTC’s price swings.
• Input your order size in BTC or USD value — KuCoin auto-converts based on current BTC price.
• Confirm the order. Your position’s PnL will now update in real-time in BTC terms, and liquidation will be calculated using BTC-based margin.
  

  Step-by-Step: Opening a USDT-Margined Position

• Navigate to “USDT-Margined” in the KuCoin Futures tab.
• Select a contract like BTCUSDT and verify your USDT balance in the futures wallet.
• Adjust leverage (e.g., 20x). Unlike coin-margined, USDT leverage doesn’t amplify margin volatility.
• Enter order size in USDT or BTC amount — KuCoin uses the current price to convert.
• Execute the trade. All PnL, fees, and liquidation levels are now displayed in USDT values, making it easier to track dollar-denominated risk.
  

  Fees and Funding Rate Implications

  
  Coin-margined contracts charge fees and funding rates in the underlying asset (e.g., BTC). If BTC’s price drops after you pay a funding fee in BTC, you effectively pay more in USD terms. Conversely, USDT-margined contracts apply fees and funding in USDT only, eliminating this hidden cost. Traders holding large positions over funding intervals must compare these impacts — coin-margined can introduce unexpected slippage in real-world value due to asset price changes between fee payments.
  

  When to Use Coin-Margined vs USDT-Margined

  
  Choose coin-margined if you’re a seasoned trader with strong conviction in holding the underlying asset long-term and want to avoid stablecoin exposure. It’s ideal for hedging spot holdings — e.g., shorting BTC perpetual while holding BTC spot to lock in value. Opt for USDT-margined if you prioritize simplicity, trade multiple assets, or lack the underlying coin. Its stable collateral makes it better for scalping or short-term strategies where consistent risk calculation matters more than asset accumulation.
  

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  FAQs

  Q: Can I switch between coin-margined and USDT-margined on KuCoin without transferring funds?
  
  No. You must manually transfer assets between your spot and futures wallets. For coin-margined, move BTC to the futures wallet; for USDT-margined, move USDT. The two margin types operate in separate wallets — no automatic conversion exists.

  Q: Does KuCoin display liquidation prices differently for each margin type?
  
  Yes. Coin-margined shows liquidation in BTC price terms (e.g., “Liquidate if BTC < $58,000”), while USDT-margined displays it in USDT-equivalent (e.g., “Liquidate if position loss > $500”). Always check the unit to avoid misreading risk.

  Q: Are leverage limits the same for both margin types?
  
  No. KuCoin often sets higher max leverage for USDT-margined contracts (e.g., 125x for BTC/USDT) versus coin-margined (e.g., 100x for BTCUSDTPERP). This reflects the platform’s assessment of lower systemic risk with stablecoin collateral.

  Q: How do I calculate PnL for a coin-margined trade manually?
  
  Use this formula:
  
  PnL (in BTC) = Position Size × (1/Entry Price - 1/Exit Price)
  
  For example, a 1 BTC long entered at $60,000 and exited at $65,000 yields:
  

• × (1/60,000 - 1/65,000) = 0.000128 BTC profit.