The Differences between USDT-margined and Coin-margined Futures

USDT-margined Futures

USDT-margined Futures on MEXC Futures are forward futures, they are linear derivatives products that are quoted and settled in USDT, a stable coin pegged to the value of the U.S. dollar.

One of the key benefits of USDT-margined futures is that you can easily calculate your returns in fiat. This makes USDT-margined futures more intuitive. For example, when you make 1,000 USDT in profit, you can easily estimate that the profit is worth approximately $1,000 – since the value of 1 USDT is pegged closely to 1 USD.

MEXC Futures supports hundreds of futures trading pairs, and you may select on the top left of the futures page.

Please make sure you have available USDT in your futures account before opening a position.

Coin-margined Futures

Coin-margined futures offered by the MEXC futures is inverse futures, which utilize cryptocurrency as collateral, which means a cryptocurrency is its benchmark currency. In the case of the BTC-margined futures, BTC will be used as an initial margin or to calculate profits.

The biggest advantage of coin-margined futures is that you can improve the efficiency of your capital utilization, and while holding cryptocurrencies, you can trade futures products. At the same time, if you need to calculate the return in fiat because the crypto is used as margin, the coin-margined futures itself comes with 1 time the leverage, although the risk increases a bit, at the same time the return may also increase.

MEXC currently offers BTC and ETH coin-margined futures. Before opening a position, please have BTC/ETH assets available in your futures account.

How to make a choice

One of the most important purposes for users to choose a coin-margined future is that it offers a rebate on their positions, which is the most ideal choice for traders who want long-sleeved positions. Holders of BTC or ETH do not need to exchange any of their holdings for USDT in order to hedge and trade on the MEXC futures market. In other words, they don’t need to sell any cryptocurrency at a low price.

When a bull market comes, investors are more inclined to continue holding on to the crypto assets on hand. Since the coin-margined futures is settled in coins, any profit is directly translated into a long-term holding of your crypto, which is an excellent way to see cryptocurrencies in long-term overweight.

However, when users do not hold other crypto assets other than USDT, they may be more inclined to consider using USDT-margined futures and enjoy the hundreds of futures trading pairs offered by the MEXC futures market. Earning profits from leveraged investment.

Closing Thoughts

The USDT-margined futures and the Coin-margined futures have their own advantages. The collateral and settlement are in different crypto. Users can trade both of them in the MEXC futures market according to their own needs.

Disclaimer: Trading crypto involves significant risk and can result in the loss of your invested capital. The materials are not related to the provision of advice regarding investment, tax, legal, financial, accounting, consulting, or any other related services and are not recommendations to buy, sell, or hold any asset. MEXC Learn solely provides information, but not financial advice. You should ensure that you fully understand the risk involved before investing.

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