Dear 8V users,
8V provides two types of futures contract products, one is USDT-based futures contract (USDT-M) and the other one is coin-based futures contract (Coin-M). Please find more information below.
The Difference of USDT-M and COIN-M
The Features of USDT-M and COIN-M
The Features of USDT-M
The digital assets are settled in USDT: transactions are quoted and settled in USDT.
The pricing is clear: each futures contract transaction indicates how much of the quote currency is needed to purchase one unit of the base currency. For example, BTC/USDT, ETH/USDT and BCH/USDT are the 'trading unit' for BTC, ETH and BCH respectively.
The Features of COIN-M
The digital assets are settled in cryptocurrencies: transactions are quoted and settled in fundamental cryptocurrencies. Traders do not need to set USDT as the margin. For example, when you open a long or short position, you simply need to purchase BTC and no need to hold any USDT. The profit and loss will be settled in BTC.
The Advantages of USDT-M and COIN-M
The Advantages of USDT-M
USDT-M is a linear futures contract quoted and settled in USDT.
The most important advantage of USDT settlement is that traders can easily realize the amount of returns in USD, which makes USDT-M more intuitive. For instance, the value of 1 USDT is almost the same as 1 USD. Hence, traders can easily figure out the profit is 500 USD when they earn 500 USDT. Furthermore, USDT settlement can significantly increase trading flexibility. Many types of futures contracts can be settled in USDT such as BTC, ETH and XRP. Traders do not have to purchase fundamental cryptocurrencies to invest. In this case, they can save more as it is not necessary to purchase additional tokens if they trade in USDT. When the market prices fluctuate widely, USDT-M can effectively lower the risk of dramatic changes of prices. Therefore, traders do not have to worry about the fluctuation of quote currency when they hedge.
The Advantages of COIN-M
COIN-M is quoted and settled in cryptocurrencies. For example, if a trader wants to open a BTC/USD futures contract position, he simply needs to purchase BTC as its initial margin.
It is an ideal option for miners and holders. COIN-M is settled in cryptocurrencies and the profits can be accumulated in the long run. Furthermore, as the price increases, the value of collateral goes up too. In the long term, it is a fabulous solution to increase the amount of cryptocurrency. If traders want to hedge their positions, they do not have to change their digital assets into USDT. Therefore, there is no need to sell any cryptocurrency at a discounted price. To hedge, traders simply need to open a short position. If the price of the digital asset falls, the profits generated will be enough to cover the loss of their investment portfolio.
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