Spot vs futures
On spot you buy the coin itself. On futures you trade a contract on its price: you can profit from a fall and use leverage, but liquidation appears. The difference on one $1,000 example — and where to start.
What spot is
Spot is simply buying a coin at the current price. Buy $1,000 of bitcoin and you hold $1,000 of bitcoin: keep it as long as you like, withdraw it to your wallet, sell any time.
- you only profit when price rises;
- you cannot lose more than you put in — even after a 50% drop the coin is still yours;
- no liquidation, no recurring payments.
What futures are
A crypto futures contract is usually a perpetual on the coin's price. You don't own the coin: you hold a position that gains or loses with price. What that gives you:
- Shorting — profit from a fall with one "Sell / Short" button.
- Leverage — a position bigger than your money: $1,000 at 5× is a $5,000 position. See Long, short and leverage.
- Liquidation — when losses nearly eat the margin, the exchange closes the position and takes the margin.
- Funding — longs and shorts pay each other every few hours. How traders earn on it: Funding rate arbitrage.
- Lower fees — on Bybit futures cost 0.02–0.055% per trade vs 0.1% on spot.
Key differences
| Spot | Futures | |
|---|---|---|
| What you buy | The coin | A price contract |
| Profit from a fall | No | Yes, short |
| Leverage | No | Up to 100× and more |
| Liquidation | No | Yes |
| Holding costs | None | Funding every 1–8 h |
| Bybit fee | 0.1% | 0.02–0.055% |
| Withdraw the coin | Yes | No |
| Best for | Long-term holding | Active trading, hedging |
Same market: a $1,000 example
Two traders with $1,000 each. One buys bitcoin on spot, the other opens a 5× futures long ($5,000 position). A 5× long is liquidated after a ~19.5% drop.
| What price did | Spot | Futures 5× |
|---|---|---|
| Rose 10% | +$100 | +$500 |
| Fell 10% | −$100 | −$500 |
| Fell 20%, then recovered | $1,000 — nothing lost | −$1,000, liquidated at the bottom |
| Fell 30% | $700 and the coin in hand | $0 |
The third row is the real difference. On spot a temporary drawdown stays temporary. On leveraged futures it can become final: the position was closed at the bottom and the rebound no longer concerns you.
To be fair, leverage alone does not make a trade dangerous. 1× futures behave almost like spot, and with a stop and proper sizing the risk per trade is the same at any leverage. What kills accounts is high leverage without a stop on the whole deposit. The position size calculator sizes from risk.
Which one for a beginner
- Buy and hold for months — spot. No liquidation, no funding, you can withdraw the coin.
- Trade both directions — futures, with three rules: a stop on every trade, 1–2% risk per trade (why), and leverage that keeps liquidation well beyond the stop.
- Start small. Beginner mistakes — mixing up long and short, forgetting the stop, ignoring fees — are cheap only on small size.
FAQ
What is the difference between spot and futures?
On spot you buy the coin and profit only from a rise. On futures you trade a price contract: you can short and use leverage, but there is liquidation and recurring funding payments.
Spot or futures — which is better for beginners?
Spot for long-term buying: you cannot lose more than you invest and there is no liquidation. Futures suit active trading, but only with a stop, 1–2% risk per trade and low leverage.
Can you trade futures without leverage?
Yes, at 1×. The position equals the margin, liquidation is very far away and results are close to spot — but you can still short and you pay or receive funding.
Coin analysis for spot and futures
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