Crypto futures account for over 60% of global crypto trading volume in 2024 and just hit an all-time high. Crypto perpetual futures let you bet on an asset’s future price without owning it, using leverage to control positions much larger than your initial capital. They offer the chance to profit in both up and down markets, but carry liquidation risks. This article will explain what is crypto futures, how they work, and compare them to spot trading.
Key Takeaways
- 💸 Advantage of Crypto Futures: Crypto futures let you control large positions with small capital through leverage but at the cost of magnifying risk. If done right, futures trading can net you significantly higher profits compared to spot trading.
- ⚠️ Margin Maintenance is Important: You must maintain the value of your maintenance margin or risk getting margin calls and even automatic liquidation.
- ⚖️ Perpetual Contracts vs. Spot Trading: Perpetual futures enable long and short exposure without asset ownership, higher liquidity, and lower fees.
- 🧠 Risk Management Is Crucial: Use stop-losses, monitor mark price, top up margin proactively, and never go “all in” to protect your account from sudden market swings.
What is Crypto Futures?
Crypto Futures is a contract to buy or sell cryptocurrencies at a future date. Traders and investors use futures contracts to speculate on the future price of cryptocurrencies such as Bitcoin.
The futures market is essentially where two types of traders bet on the future price of an asset. The side that believes the asset will go higher in the future is opening a long trade, while those who believe it will go lower are opening a short. Traders profit if the price moves according to their prediction. On the other hand, traders get liquidated and lose all their assets if the price moves too far against their bet.
Think of it like this: You believe the price of Bitcoin will go up next week. With a futures contract, you can lock in a deal today and potentially earn a profit if your prediction is correct—even if you don’t have any Bitcoin.
Crypto futures is the most popular derivative product because of the potential profits for users through leverage. With leverage, traders can instantly 10x or even 100x their initial capital. Futures now account for more than half of crypto’s trading volume.
Why Do People Trade Crypto Futures?
- Profit from either direction: Whether the market goes up or down, futures traders can always benefit from the market.
- Trade with leverage: Opening a 10x, 25x, or even 100x bigger position than our capital. This multiplies potential profit significantly.
- Hedging: Crypto futures trading is a good hedging tool for anticipating potential losses from spot trades. Traders usually hedge by opening up a short position in other assets that are more likely to fall.
How Crypto Futures Work
Crypto Futures contracts are fundamentally different from spot trading. Futures trading doesn’t directly involve the underlying assets, users instead trade the value of each contract. Traders never need to buy or sell assets such as BTC as the gains and losses are usually settled in USDT or USDC. Additionally, crypto futures contract is usually called perpetual contracts because they don’t have an expiration date.
There are two key elements of trading crypto futures contracts:
- Leverage: Leverage is a feature that lets you borrow assets from a crypto exchange to amplify your potential profit. A 10x leverage of $100 lets you open a $1,000 trade, which means you borrow $900 from the exchange.
- Margin: Margin in futures trading is the cost you need to open and keep your positions. Maintenance margin is the lower threshold you must maintain to keep your position open. If your asset value falls below the maintenance margin, you will get a margin call to close or top up your asset. If you can’t restore your margin above the maintenance margin, the exchange will liquidate (close) your position, where you’ll lose 100% of your asset.
- Funding Rate: Keeps futures price in par with spot. When the price is above spot, long traders need to pay short traders and vice versa. You need to pay the funding rates every 8 hours.
More on leverage: Tutorial For Using Leverage – Pintu Academy.
Types of Trade in Crypto Futures
- Long: You buy a futures contract if you believe the price will rise.
- Short: You sell a futures contract if you believe the price will fall. In this way, you will still profit when the price keeps falling.
Key Differences of Crypto Futures vs Spot Trading
| Faktor | Futures Trading | Spot Trading |
|---|---|---|
| Asset Ownership | No ownership | Direct ownership of asset |
| Advantages | You can only profit when the price rises | You can only profit when the price rises |
| Risks | Higher risk due to leverage | No added risk |
| Initial Cost | Flexible due to the use of leverage | You need the full cost when buying an asset |
What are the Advantages of Crypto Futures?
Many experienced traders choose crypto futures instead of just spot trading. Although leverage is a huge risk, in the hands of a skilled trader, it becomes an amazing tool that will amplify profits tenfold or even more.
Below are several advantages of crypto Futures:
- Speculation: Traders speculate on the future direction of cryptocurrency prices by opening future positions. This allows them to potentially profit from the high volatility environment, such as token unlocks, regulatory developments, or macroeconomic conditions. Speculating is an extremely high-risk,high-return trading that should be treated carefully.
- Leverage: Leverage is both a blessing and a curse for future traders. If used correctly, it can increase profits exponentially even though the price has only moved slightly.
- Higher liquidity and lower fees: Futures trading usually offers higher liquidity and lower fees than spot trading because many of its users trade in large volumes.
Risks of Crypto Futures
- Liquidation: Liquidation happens when the price moves too far against your trade, and your maintenance margin hits the limit. If you’re not careful, the worst-case scenario is that you can lose all the funds in your account (using cross margin).
- Higher risk than spot trading: Perpetual futures trading carries significantly higher risk compared to spot trading, especially if high leverage is involved. A 5% move against your trade can result in a 50% loss.
- Volatility: One of the higher downsides of trading futures is the so-called “scam wick” when volatility is at its highest. This is when the price suddenly wicks lower only to recover minutes later. BTC has experienced this type of movement several times, including the COVID crash and the start of the Ukraine-Russia conflict.
In crypto futures trading, you should watch the mark price instead of the normal price, as this is the reference price used to calculate profit, loss, and liquidation.
Tips for Crypto Futures Trading
1. Start Slowly
Position sizing is one of the most important aspects of crypto futures trading. Inexperienced traders or users who are just starting out should limit their position to small amounts. Most spot traders will likely need to adjust to futures trading. So, these smaller positions are designed to help learn the nature of futures trading.
Read more: Crypto futures trading tips.
2. Never Go All-In
New traders are usually very ambitious when they take a position, often going all-in to chase big profits. However, as the saying goes, “manage your risk or the market will manage it for you”, these “all-in” type of traders often get punished by the market. A sudden 20% drop can lead to you losing your entire net worth. As we’ve learnt over the past 2 years, the market is becoming highly unpredictable.
3. Watch Your Maintenance Margin
Maintenance margin is the buffer between you and liquidation. If the price starts moving against your trade, you need to check your maintenance margin often and top it up to prevent being liquidated. Periodically topping up your margin is also not a bad idea to prevent liquidation from sudden price movement. Keeping a healthy buffer can also prevent you from being constantly worried over a trade.
Read more: How to avoid liquidation.
4. Always Use Stop Loss
Stop loss is the magic ingredient for not getting liquidated in your futures trade. Stop loss should always be set above your liquidation price and according to your risk tolerance. If you can only tolerate a 20% loss in your trade, set the stop loss around that level. Additionally, avoid round numbers for stop loss as they are usually very crowded and reduce the chance of your stop loss getting triggered.
Tutorial on how to use Stop Loss: Strategy for Determining Take Profit and Stop Loss – Pintu Academy.
How to Use Pintu Pro Futures Web
You can buy cryptocurrencies such as BTC, SOL, and many others directly through Pintu Pro Web. In **Pintu Pro web,** you can trade both Futures and spot!
How to trade Crypto Futures in Pintu Pro Web:
- Open https://pintu.co.id/en.
- Click the button Launch Pro on Desktop in the upper center.
- Sign up or log in to Pintu Pro Web.
- Open the Futures section.
- Trade BTC and other cryptocurrencies.
The Pintu app is also compatible with popular digital wallets such as MetaMask, making your transactions even more convenient. Go ahead and download the Pintu app on the Play Store or App Store today! Your security is guaranteed, as Pintu is regulated and supervised by OJK and CFX.
In addition to trading, Pintu also allows you to learn more about crypto through a wide range of articles on Pintu Academy, updated weekly!
All articles from Pintu Academy are intended for educational purposes only and do not constitute financial advice.
Conclusion
Crypto perpetual futures are powerful tools for hedging and speculation, offering flexible long/short positions, deep liquidity, and fee advantages over spot markets. However, the leverage and margin system introduces substantial risks, including sudden liquidations and outsized losses if trades aren’t sized and managed carefully. By understanding how leverage, margin, and funding rates work, setting prudent stop-loss levels, and maintaining healthy margin buffers, traders can harness the profit potential of futures while minimizing the danger of catastrophic account wipeouts.
References
- Kraken Learn, “What are Crypto Futures Contracts?”, Kraken, accessed on May 6, 2025.
- Robinhood Learn, “What are Bitcoin, Ether, and Solana crypto futures?”, Robinhood, accessed on May 6, 2025.
- Hikma Dirgantara, “What is Perpetual Futures Trading?”, Pintu Academy, accessed on May 7, 2025.
- Prableen Bajpai, “Cryptocurrency Futures: Definition and How They Work on Exchanges”, Investopedia, accessed on May 7, 2025.
- “What is Crypto Futures trading? A beginner’s guide to how it works”, PrimeXBT, accessed on May 8, 2025.