Difference Between Spot Trading and Futures Trading in Cryptocurrency

📌 1. What You're Buying

Spot:
You are buying actual cryptocurrency. For example, if you buy 1 BTC — it’s yours, and you can transfer it to a wallet.
Futures:
You're not buying the asset itself. You're entering into a contract to buy or sell the asset in the future. In most cases, the position is closed before expiration, and no actual crypto is received.

📌 2. Ownership and Capital

Spot:
You need to have 100% of the funds to make a purchase. No leverage by default.
Futures:
You can trade using leverage — e.g., with $100, you can open a $1,000 position. This increases both potential profits and risks.

📌 3. Expiration

Spot:
No expiration. You can hold the asset indefinitely.
Futures:
Contracts may have an expiration date (e.g., quarterly) or be perpetual, which involves a funding mechanism between long and short positions.

📌 4. Direction of Trade

Spot:
You can only profit when the asset price increases. Earning on a decline requires margin or advanced tools, often unavailable on basic platforms.
Futures:
You can go long or short — profiting from both rising and falling prices. Ideal for hedging or active trading.

📌 5. Fees and Funding

Spot:
Fixed trading fees, no funding payments.
Futures:
In addition to trading fees, funding fees apply for perpetual contracts. Depending on your position, you may pay or receive funding.

📌 6. Risk Level

Spot:
Risk is limited — at worst, you lose what you invested, but the asset remains in your account.
Futures:
Higher risk. Liquidations are possible if the market moves against you, especially when using high leverage.

📌 7. Use Case Comparison

🟩 Simple Example:

Spot: You have $10,000 and buy 1 ETH at $3,600. If ETH drops to $2,000, you're at a loss — but you still hold 1 ETH.
Futures: You have $1,000 and trade 1 ETH at 10x leverage ($10,000 exposure). If ETH drops to $3,200, your position may be liquidated, and you can lose your entire deposit.

Luuk Strijers

Deribit CEO