The main difference between USDT-margined and coin-margined contracts is which asset is used as margin and which asset is used to settle profits and losses. Both can be used to trade cryptocurrency prices, and both involve the risks of price fluctuations, leverage, and liquidation.
Main differences
| Comparison item | USDT-margined contracts | Coin-margined contracts |
| Margin asset | USDT | The cryptocurrency specified by the contract, such as BTC |
| Profit and loss settlement asset | USDT | The cryptocurrency specified by the contract |
| How profits and losses are displayed and understood | Displayed in USDT, making the amount more straightforward | Displayed as an amount of the cryptocurrency; its value converted to USDT also changes with the cryptocurrency price |
| What to consider when holding the asset | The risks of USDT and the contract position | Price fluctuations of the settlement currency itself, as well as the risks of the contract position |
The table describes the margin type and does not mean that the two types of contracts have the same contract value, leverage, fees, or liquidation rules. Refer to the trading page of the selected contract for specific parameters.
What are USDT-margined contracts?
USDT-margined contracts use USDT as margin, and the profits and losses of the position are also calculated and settled in USDT. For example, when trading a USDT-margined contract related to the price of BTC, you do not need to hold BTC as margin for the position.
If you are accustomed to viewing the amount invested and your profits and losses in USDT, this method may be easier to understand. However, USDT-margined does not mean that the position is risk-free: when the underlying price moves in an adverse direction, the margin may still incur losses.
What are coin-margined contracts?
Coin-margined contracts use the specified cryptocurrency as margin, and profits and losses are also settled in the currency specified by the contract. For example, for a BTC coin-margined contract, BTC may be used as the margin and settlement asset.
If you already hold the relevant cryptocurrency, you may consider this type of contract. However, when reviewing profits and losses, you should consider not only the amount of the cryptocurrency, but also that its value converted to USDT or other assets will change with market conditions. This does not mean that coin-margined contracts are necessarily more suitable for cryptocurrency holders; you should still consider the risks of the contract.
Understand the difference with an example
Assume that two traders are both trading the price of BTC and that their respective positions subsequently generate profits:
- A trader using a USDT-margined contract receives profits settled in USDT, such as an increase of 100 USDT in their account.
- A trader using a BTC coin-margined contract receives profits settled in BTC, such as an increase of 0.002 BTC in their account. How much this BTC is worth in USDT at that time depends on the BTC price at that time; if it is held thereafter, its converted value will also change.
100 USDT and 0.002 BTC are not equivalent profit amounts from the same transaction; they are only used to demonstrate the difference in settlement currencies. Actual profits and losses must be calculated based on the value, position, price, and fees of the selected contract.
| Comparison item | USDT-margined perpetual contract | BTC-margined perpetual contract |
| Collateral asset | USDT | BTC |
| Pricing unit | USDT | USD |
| Profit and loss settlement currency | USDT | BTC |
| Contract value | Each contract is 0.0001 BTC (such as BTC_USDT) | Each contract is 1 USD (such as BTC_USD) |
| Margin mode | Isolated / Cross | Isolated / Cross |
Comparison of use cases
The following examples assume that the two contracts have the same BTC price exposure when the positions are opened, and exclude trading fees, funding fees, and slippage. The coin-margined figures use a common BTC/USD inverse contract for illustration; actual profits and losses are still subject to the value and calculation rules of the traded contract.
Short: expecting the BTC price to fall
Assume that the BTC price is 50,000 USD when the position is opened and that the trader establishes a short position equivalent to 1 BTC. BTC subsequently falls to 45,000 USD:
With a coin-margined contract, the trader receives BTC; when the BTC price falls, the same USD value generally corresponds to a larger amount of BTC. This does not mean that it earns an additional USD profit equivalent to 0.1111 BTC compared with a USDT-margined contract. If the trader continues to hold the BTC received, its converted value will continue to change with the BTC price.
Long: expecting the BTC price to rise
Using the 50,000 USD opening price and the same price exposure, if BTC rises to 55,000 USD:
Profits from a coin-margined contract are credited in BTC, while profits from a USDT-margined contract are credited in USDT. The main difference is which asset you receive and which price risks you take on by holding that asset afterward; you cannot simply compare the numbers “5,000” and “0.0909”, which are in different units.
How should you choose?
If you want to manage margin and view profits and losses in USDT, you may first learn about USDT-margined contracts. If you want to use the cryptocurrency you hold as margin and accept having profits and losses settled in that currency, you may learn about coin-margined contracts. Before placing an order, confirm the margin asset, settlement currency, contract value, leverage, and risk requirements shown on the trading page.
Disclaimer
This article is provided for product information and educational reference only. It does not constitute investment, trading, financial, or legal advice, nor does it constitute an offer to buy or sell any digital assets. The examples in this article are for illustrative purposes only and do not include factors such as trading fees and funding fees; actual results may differ.
Product features, trading rules, fees, and page information may be adjusted. If this article is inconsistent with the latest AstralX announcements or the information displayed on the trading page, the applicable latest rules and actual page information shall prevail.
Digital asset contract trading involves significant risk. Leverage amplifies the impact of price fluctuations on margin, and you may lose all of your invested margin. Before trading, make sure you fully understand the product rules and make prudent decisions based on your financial situation and risk tolerance.