What is the difference between Spot crypto transactions and Crypto Futures?

• Spot Trading: The activity of buying or selling crypto assets directly using the current price of the asset. This means that you will own the asset after buying it on the market.

Example: When you buy 1 BTC for $30,000, then you have to pay $30,000. Then, If the price of BTC rises to $35,000, you can sell it for a profit of $5,000. Then, If the price of BTC drops to $25,000, you will experience a loss of $5,000 if you sell.

• Crypto Futures: The activity of trading the price movements of crypto assets without actually owning the asset. You are simply speculating on whether the price will go up or down.

Example: If you open a Long position with an initial capital of USDT 2,000 and you use 25x Leverage, you will get a position worth USDT 50,000. However, if your initial margin balance drops to USDT 1,500, you will get a Margin Call because your margin has dropped to 75% of the initial margin. If your initial margin continues to drop to 100%, your position will be automatically liquidated.

Here are the differences between spot trading and Crypto Futures: