Best Bitcoin BTC Inverse Futures Trading Site with High Leverage

Best Bitcoin BTC Inverse Futures Trading Site with High Leverage

We list where to find the best Bitcoin BTC Inverse Perpetual Futures Trading contracts. We compare and review the top Bitcoin and altcoin trading sites. with regards to

  • leverage
  • listed markets
  • trading fees

Also, we describe the differences between inverse contracts and linear contracts.

No Financial Advice, Information only. Do your own research. 

Cryptocurrencies are high-risk investments.

We earn an affiliate commission for marketing these sites

List: Best Bitcoin BTC Inverse Futures Trading Sites With High Leverage

The best Bitcoin BTC inverse perpetual and future trading sites are listed in the table below.

  • Bybit: Great $3000 bonus until the 17th July 2022. Read more on our Crypto Bonus For Signing Up 2022.
  • Kucoin: Best Bitcoin BTC inverse trading site for US customers
  • Binance: Have the most listed inverse perpetual (COIN-M), the greatest trading volume, and the lowest fees.

Bybit Inverse Perpetual Contracts

The Bybit inverse perpetual contracts use BTC/ETH/EOS/XRP as the base currency.

Traders need to confirm traded quantity in terms of USD (Quoted currency) and then use their base currency (such as BTC, ETH) to calculate margin, profit, and loss.

If a trader wants to trade a BTCUSD inverse contract, he must use BTC as his base currency. If he trades on ETHUSD contracts, he needs to hold ETH. 

Bybit Inverse Contract Trading Fees

Inverse Perpetuals: The maker fee starts at 0.01% and the taker fee at 0.06%.

 See full fee schedule from Bybit.

Bybit Inverse Contract Pros and Cons

Pros

  • You can keep your crypto as collateral which is very favorable in a bull market (But vice versa in a bear market where your collateral decreases if the crypto loose in value)
  • Relatively many listed inverse perpetual contracts
  • High leverage available

Cons

  • More complicated to calculate profits and losses than linear perpetual contracts and futures

M=Maker, T=Taker

Kucoin COIN M Inverse Perpetuals

On Kucoin you can trade COIN M inverse perpetuals for BTC, ETH, DOT and XRP. 

Kucoin Inverse Contract Trading Fees

There are two different Kucoin perpetual trading fees

  • Trading fees for opening and closing a perpetual contract
  • Funding rate to maintain your position

Kucoin perpetual maker fee starts at 0.02% and the taker fee starts at 0.06%.

You can pay lower Kucoin perpetual fees by

  1. Trade larger volumes
  2. Hold the Kucoin token
  3. Use our referral link

Read more about Kucoin trading fees.

The funding rate is 0.01% and you can find it on the Kucoin trading screen.

Kucoin Coin M Inverse Contract Pros and Cons

Pros

  • Low fees
  • You can get lower fees by holding the Kucoin KCS token or increase your spot/futures trading volume

Cons

  • More complicated to calculate profits and losses than linear perpetual contracts and futures

M=Maker, T=Taker

Binance COIN M Inverse Perpetuals and Futures

Binance offers inverse perpetuals and futures. They call the inverse perpetual for COIN-M perpetual and the inverse futures for COIN-M delivery (since they have a settlement day contrary to perpetual contracts). 

Binance COIN-M Contracts Trading Fees

For trading COIN-M contracts you have to pay

  • Trading fees for opening and closing a contract
  • Funding fees for keeping a contract open
  • Insurance Clearance Fee

Binance COIN-M Contract Pros and Cons

Pros

  • Low fees
  • You can get lower fees by holding the BNB coin
  • Lower your fees further by using our referral link
  • Many listed COIN M perpetual and standard futures contracts

Cons

  • More complicated to calculate profits and losses than linear perpetual contracts and futures
  • Binance is not very transparent about what jurisdictions are allowed to trade futures on their platform

M=Maker, T=Taker

What are crypto inverse futures?

Crypto inverse perpetual contracts or futures are crypto-margined trading instruments quoted in USD but settled in the underlying crypto (BTC, ETH, etc).

Example inverse contracts

If you want to open an inverse contract for ETHUSD, you must hold ETH for margin in the trading account.

Your profits or losses at the time you are closing your position will be paid or subtracted in ETH.

What is quote currency and base currency?

The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.

Example: BTC/USDT, BTC is Base currency and USDT quote currency.

Inverse crypto contracts VS Linear contracts

The difference between inverse futures contracts, also called coin-margined contracts(COIN-M), is that linear futures contracts are USDT-margined and USDT settled, while inverse futures contracts are margined and settled by the underlying cryptocurrency (BTC, ETH etc).

Advantages of Linear Contract

  1. You can use the same settlement coin(USDT) for the linear contracts across various futures markets. You don’t have to buy the underlying coins to fund your futures contracts.
  2. It’s easier to calculate your returns in fiat equivalents.

Advantages of Inverse Contract

  1. Since inverse contracts are priced and settled in the underlying cryptocurrency, the profits of Inverse Contract can contribute to your long-term stack, especially for miners and long-term holders.
  2. You can invest and earn the same cryptos when the price rises via Inverse Contract. Moreover, holding and investing your crypto assets allows you to hedge your positions in the Futures market without converting any of your holdings into USDT (creating a taxable event). 

When is it favourable to trade inverse futures contracts?

If your main goal is to accumulate BTC regardless of its USD price, it’s more convenient to trade inverse futures and have BTC as your base currency for performance tracking reasons. Also, you don’t have to buy and sell BTC for USDT when you buy or sell a futures contract (If you want exposure to BTC between your selling and buying futures contracts).

If you aim to accumulate USD regardless of BTC price, you should consider trading linear USDT perpetual.

Inverse contracts can be useful when you expect prices to increase for an asset. 

Example when an inverse contract is favorable over a linear contract

Assume you have a long ETHUSD inverse contract position. As the prices increase, you will accumulate your profits in ETH.

The USD value of your accumulated ETH will continue to increase with its rising prices. Had you used a linear contract, you would end up with less value in USD than compared to holding ETH at the end of your trade.

Calculation example of an inverse contract

  1. You buy 10.000 BTCUSD inverse contracts at BTC price = 8.000 USD
    (Now you are actually selling 10.000 USD and buying an equivalent value of BTC (10.000/8.000), which is equivalent to 1.25BTC)
  2. You close all contracts at BTC = 12.500 USD (Now, you are buying back 10.000 USD worth of contracts and selling the equivalent value of BTC (10.000/12.500) which equates to 0.8 BTC)
  3. Profit/Loss for a Long position = Beginning Value of Quote Currency (1.25 BTC) – Ending Value of Quote currency (0.8BTC) = 0.45 BTC (0.45BTC*12.500=$5625)
If the contract was settled in USD the profit would have been (1.25*12.500-10.000 = $5625). However, the difference is that you would receive this profit in USD.
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