There are significant differences in the risk characteristics of Bitcoin (spot) and Bitcoin contracts, and the core difference stems from the trading attributes of the two. 1. The transmission methods of price fluctuation risks are different: spot profit and loss depends on the price difference between buying and selling, and there is no leverage amplification effect; while contracts are leveraged, price fluctuations are exponentially amplified, which may lead to a liquidation. 2. Different positions risks: the spot holding cost is low and there is no risk of forced liquidation; while the contract needs to maintain margin, there is a possibility of liquidation, and there is a risk of holding expenses and maturity settlement. 3. Different market mechanism risks: spot is mainly affected by market supply and demand, policy supervision, etc.; contracts face pin plug risk, liquidity exhaustion and low fault tolerance caused by high leverage. 4. Different operating risks: spot operation is simple and losses are controllable; wrong judgment of contract direction is more expensive, errors in parameter setting may lead to huge losses, and the short selling mechanism is complex. 5. The supervision and compliance risks are different: spot supervision is relatively clear, and compliance risks are concentrated on the legality of the trading platform; contracts, as derivatives, face stricter supervision, and are completely prohibited by some countries, the platform's compliance is uneven, and it is difficult to protect rights.

Bitcoin trading platform:

Ouyi OKX:

Binance Binance:

Huobi:

Gateio Sesame Opening:

1. The transmission methods of price fluctuation risks are different

• Bitcoin (spot)
  The risk is directly linked to the price fluctuations of Bitcoin, and the profit and loss only depend on the price difference at the time of buying and selling. For example:
  • If you buy 1 bitcoin for $10,000, the price will fall to $9,000 and lose $1,000 (10%);
  • The price rose to $11,000, and the profit was $1,000 (10%).
    The volatility range is entirely determined by the market conditions, without a leverage amplification effect, and the upper limit of the loss is the initial principal invested (extreme situations such as returning to zero, but the probability is extremely low).
• Price fluctuations in Bitcoin contracts are exponentially amplified by multiples because they support leveraged trading (such as 5 times, 10 times, 100 times). For example:
  • Under 10 times leverage, the price of Bitcoin fell by 10%, and the loss of holdings reached 100% (the position is broken, and the principal is lost);
  • If the price rises by 10%, the profit will reach 100%.
    Even if the price fluctuates slightly, it may cause huge losses due to leverage, and the risk transmission speed is much faster than that of spot stocks.

2. Different risks of holding positions

• Bitcoin (spot)
  • Low cost of holding: long-term holding does not require additional costs (only storage security risks are required, such as the stolen money storage, exchange bankruptcy, etc.).
  • No forced closing risk: No matter how much the price falls, as long as the asset is not actively sold, the asset will always exist (unless the project returns to zero), and you can "hold the order" and wait for the rebound.
  • Time risk: Prices may be sluggish for a long time, but the asset will not be directly lost due to short-term fluctuations.
• Bitcoin Contract
  • Margin maintenance risk: Leveraged positions must keep the account margin above the "maintain margin rate", otherwise it will be forced to close (liquid). Regardless of whether the subsequent price rebounds, the position has been liquidated and the principal will be lost.
  • Overnight fee/Fund rate: Some contracts (such as perpetual contracts) need to pay position fees (swap between long and short parties), and the accumulation of long-term position costs may erode profits.
  • Expiration risk: The delivery contract has a fixed expiration date. If the position is not closed in time, it will be forced to settle at the delivery price, which may be deviated from the expected price.

3. Different market mechanism risks

• Bitcoin (spot)
  The risks mainly come from market supply and demand, policy supervision (such as prohibited transactions), technical vulnerabilities (such as blockchain attacks), etc., which are "systemic risks of the assets themselves", but the transaction mechanism is relatively simple and transparent.
• Bitcoin Contract
  • Pin insertion risk: Since leverage amplifies the impact of funds on prices, the main force may trigger the stop loss line or liquidation line of a large number of retail investors through "pin insertion" (instantly sharply rising or falling prices) to harvest margin.
  • Liquidity risk: In extreme market conditions, the contract market may experience liquidity depletion, resulting in the inability to close the position or the transaction price is extremely different from expectations (slip).
  • Leverage multiple risk: The higher the leverage (such as 100 times) is more sensitive to margin, and extremely small price fluctuations may trigger a position explosion, with extremely low fault tolerance.

4. Different operating risks

• Bitcoin (spot)
  The operation logic is simple: buying means holding assets, selling means cashing out returns. The losses of wrong operations (such as buying high and selling low) are limited to the actual price difference, and the risks are controllable.
• Bitcoin Contract
  • The cost of wrong direction judgment is higher: spot prices fall by 50%, loss by 50%; under 10 times leverage, a 5% drop is a liquidation, and the consequences of wrong direction are more serious.
  • Risk of setting leverage parameters: If you mistakenly set the leverage multiple (if you originally wanted to set 5 times but set it to 100 times), or if you forget to set the stop loss, you may lose completely in a small fluctuation.
  • Complexity of long and short mechanism: Contracts support short selling (profits when falling), but short selling itself requires judging the downward trend, which requires higher market analysis capabilities for investors and greater risks of wrong judgments.

5. Regulatory and compliance risks are different

• Bitcoin (spot)
  The supervision of spot trading in most regions around the world is relatively clear (partially prohibited and partially restricted), and compliance risks are mainly concentrated on whether the trading platform is legal.
• As a derivative, Bitcoin contracts are more strictly regulated:
  • Some countries (such as China) have completely banned cryptocurrency contract transactions, and participating in such transactions may face legal risks.
  • There are large differences in platform compliance. Some small platforms may have malicious price manipulation and profit deduction, which is difficult for investors to protect their rights.

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