Differences Between USDT-M and BTC-M Perpetual Contracts – VOOX

Aspect	USDT-M Perpetual Contracts	BTC-M Perpetual Contracts
Collateral Asset	USDT	BTC
Quote Currency	USDT	USD
PNL Settlement Currency	USDT	BTC
Contract Value	Each contract is 0.0001 BTC (e.g., BTC_USDT)	Each contract is 1 USD (e.g., BTC_USD)
Margin Type	Isolated / Cross	Isolated / Cross

Aspect	USDT Contracts	BTC Contracts
Margin Asset	USDT (Stablecoin)	BTC (Volatile Asset)
Margin Risk	USDT depeg risk (e.g., volatility)	BTC price swings devalue margin
Liquidation Sensitivity	Primarily affected by position direction	Dual impact: position direction + BTC collateral value

BTC-M perpetual contracts use BTC as collateral and settlement currency. Their main characteristics are as follows:

BTC Settlement: All profits and losses are settled in BTC, meaning that fluctuations in the market will directly impact the final profit and loss calculations.
Suitable for Long-Term Holders: If you hold BTC for the long term, BTC-M perpetual contracts allow your positions to appreciate directly in BTC, especially in a bull market where your collateral increases with BTC prices.
Preferred by Miners or Hedgers: For those who hold BTC long-term or need to hedge, BTC-M perpetual contracts are a good choice since there is no need to convert BTC into other assets.

USDT-M perpetual contracts use USDT as collateral and settlement currency. Their main characteristics are as follows:

Intuitive Fiat Valuation: Since USDT is pegged to the US dollar, the return from USDT-M perpetual contracts can be directly valued in USD, making calculations more straightforward. For example, a return of 500 USDT equates to approximately 500 USD.
Diverse Trading Assets: With USDT-M perpetual contracts, users can use the same USDT collateral to trade multiple cryptocurrencies (e.g., BTC, ETH), avoiding the hassle of exchanging between different currencies and saving on conversion fees.
Suitable for Fiat-Valued Users: USDT-M perpetual contracts are ideal for users who do not want to bear the volatility risks of cryptocurrencies, especially those accustomed to fiat valuations, facilitating profit and loss calculations.

1. Short Selling Scenario Example

Assuming 1 BTC = 50,000 USD and you predict BTC prices will fall:

In a BTC-M perpetual contract, you use 0.1 BTC and open a short position of 1 BTC.
In a USDT-M perpetual contract, you use 1,000 USDT and open a short position of 1 BTC.

If BTC price falls by 10% (from 50,000 USD to 45,000 USD):

The profit from the short position in the BTC-M perpetual contract will be calculated in BTC. Due to the price drop, the profit will be slightly less than in the USDT-M perpetual contract.
The profit from the USDT-M perpetual contract will be calculated in USDT, which is 500 USDT.

2. Long Buying Scenario Example

Assuming you predict BTC prices will rise:

In a BTC-M perpetual contract, if BTC rises by 10% (from 50,000 USD to 55,000 USD), you will earn more BTC, and this profit will increase further with rising BTC prices.
The profit from the USDT-M perpetual contract will be relatively fixed, calculated in USDT, and will not be affected by BTC price fluctuations.

BTC-M perpetual contracts are suitable for those who hold BTC long-term or want to appreciate their BTC, especially in a bull market where rising BTC prices can generate additional profits.
USDT-M perpetual contracts are better for users seeking simplified calculations and wanting to avoid the volatility of cryptocurrencies, making them suitable for short-term trading and fiat valuations.

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