Futures or Spot Margin trading for me in this case?

[Synchronice]

We all see that Bitcoin's price is around 60K USD. To my mind, this is the lowest price we will see or the least it can go will be 50-55K USD. I have some Bitcoins on my account but I don't like the fact that the price went from 120K to 60K because now I'm basically in 50% loss. So, I decided to deposit my Bitcoins on a crypto exchange and open a position with 2x or 3x leverage because I'm sure that the price won't go down below 40K and 30K.
But here is the thing, I want to keep the position open for a long time, like months or probably a year or two, until Bitcoin's price reaches 120K again. So, what do you suggest me to do? I don't want fees to eat my money. Is it better to open long position on futures with 2x/3x leverage or is it better to trade on Spot with 2x/3x margin? Let's say that I plan to trade on Binance or ByBit.

[Oshosondy]

Stay away from margin trading, the charges for borrowing is too much.

In the perpetual future, you think that the funding rate will almost all the time be positive and which would be deducted from those that go on long position. That is true, stay aways from it.

Go to Bybit, under future, do not use perpetual, use futures. Only few coins are listed there. You will see bitcoin position that you can open for a year without no funding rate. The next one will close by December if this year. After that, open another one using exactly the exact bitcoin that you deposited in 2 or 3x for the calculation (not in USDT 2 or 3x). The next one after this December closure will close in the next December 2027. Binance offer up to 6 months I think.

But why not leave it on your wallet? Future trading is very risky and tempting. This can be the advantage of the margin trading, but more charges and not suitable for long term position holding.

[sergiorus]

We all see that Bitcoin's price is around 60K USD. To my mind, this is the lowest price we will see or the least it can go will be 50-55K USD. I have some Bitcoins on my account but I don't like the fact that the price went from 120K to 60K because now I'm basically in 50% loss. So, I decided to deposit my Bitcoins on a crypto exchange and open a position with 2x or 3x leverage because I'm sure that the price won't go down below 40K and 30K.
But here is the thing, I want to keep the position open for a long time, like months or probably a year or two, until Bitcoin's price reaches 120K again. So, what do you suggest me to do? I don't want fees to eat my money. Is it better to open long position on futures with 2x/3x leverage or is it better to trade on Spot with 2x/3x margin? Let's say that I plan to trade on Binance or ByBit.

You'd have to sell your BTC to open a position on futures as they use USDT as collateral.
Besides, the funding will eat your funds very quickly as it's positive most of the time.

You can borrow USDT against your BTC on Binance and Bybit and buy more BTC with it. Yearly interest rate for USDT borrowing is not that bad.

If you wanna go for an absolute bargain you can get WBTC and borrow against it on some DeFi lending app - this way interest rate could be lower. But there is both smart contract risk and Wrapped BTC risk versus simply CEX risk.

[EL MOHA]

But here is the thing, I want to keep the position open for a long time, like months or probably a year or two, until Bitcoin's price reaches 120K again. So, what do you suggest me to do? I don't want fees to eat my money. Is it better to open long position on futures with 2x/3x leverage or is it better to trade on Spot with 2x/3x margin? Let's say that I plan to trade on Binance or ByBit.

Don’t go into this quest without properly understanding the repercussions surrounding the trading patterns, futures would be definitely while margin eats up the capital through fees. For me the biggest worry is the prolonged exposure to the centralized exchange, this will mean that you have to actually leave the whole coins for as long as you wish and that’s very risky in terms of ownership because we don’t know what happens to the exchange in the future. Personally i agree with the idea of actually keeping the coins in your personal wallet until you want to take profit

[logfiles]

Futures/spot margin trading is much better if the positions are short term or day trading or scalp trading and not opening a position and waiting for months. Those fees are going to eat up your profit for nothing, and you are still exposed to the risk of the price dropping further. So on top of your 50% loss, you might lose even some more money.

Since you sat through the drop from 120K to 60K, my suggestion is you just wait on that spot BTC until it's back up and next time know when to exit the market when it moves against or in your preferred direction

[Alphakilo]

But here is the thing, I want to keep the position open for a long time, like months or probably a year or two, until Bitcoin's price reaches 120K again. So, what do you suggest me to do? I don't want fees to eat my money. Is it better to open long position on futures with 2x/3x leverage or is it better to trade on Spot with 2x/3x margin? Let's say that I plan to trade on Binance or ByBit.

Don’t go into this quest without properly understanding the repercussions surrounding the trading patterns, futures would be definitely while margin eats up the capital through fees. For me the biggest worry is the prolonged exposure to the centralized exchange, this will mean that you have to actually leave the whole coins for as long as you wish and that’s very risky in terms of ownership because we don’t know what happens to the exchange in the future. Personally i agree with the idea of actually keeping the coins in your personal wallet until you want to take profit

OP should consider using quarterly futures with fixed expiration date that have zero funding fees and zero interest fees as well, because this would eliminate in total the unpredictable bleeding nature of funding rates or margin interest daily.

Also, I do think that the best way to not lose out much would be to hold spot without leverage no matter how appealing it might look, because with spot Bitcoin, time is an ally and one can easily wait for the market to recover but when leverage is introduced, it is a ticking time bomb and who says the market can't dip further below the $40k margin and who says exchange liquidators or any flimsy excuses can't reduce your portfolio balance on an exchange for that long?

[BitMaxz]

Go to Bybit, under future, do not use perpetual, use futures. Only few coins are listed there. You will see bitcoin position that you can open for a year without no funding rate. The next one will close by December if this year. After that, open another one using exactly the exact bitcoin that you deposited in 2 or 3x for the calculation (not in USDT 2 or 3x). The next one after this December closure will close in the next December 2027. Binance offer up to 6 months I think.

I don't think it's a good idea to choose non-perpetual futures because those choices have expiration dates compared to perpetual ones.
That is why they called it "perpetual." It does not expire since OP is going to hold a position for months or years; I suggest sticking with the perpetual one. Not all contracts are available for longer; usually you can see a 3-month or 6-month longer expiry date.

However, the problem with PERP is you need to maintain it with funding fees, but this isn't stable; it might spike during bullish or bearish periods, and you are either going to pay or get paid while holding a position. Funding fees would bleed your position; it's not good for holding longer investments. If you got a stable 0.01% funding rate after a year, your position will be forced to be liquidated because your initial investment will be completely eaten up by the funding fees in 11 months.

@OP If I were you, I would suggest sticking with spot because trading futures will wreck your mindset if you lack knowledge of how it works.
Holding a position for weeks or a few months would work in futures but is not good if you are going to hold it for a much longer time, like you said, 1 or 2 years.
If you want to make your investment gain a higher profit, then altcoin is the alternative because when Bitcoin pumps, smaller altcoins pump much harder. Like, if BTC increases 2x, possible altcoins could go 5x, 10x, or above. Recommended options are Ethereum and Solana and other altcoins like Tron. I know you only believe in bitcoin, but this is the only option if you seek much higher profit by holding your coins for a much longer time compared to futures, where your position keeps bleeding while holding.

Or just DCA buy BTC today with your current funds, and you can buy again later if you get more funds since the next block halving cycle is still a long journey; we still have much time to accumulate more BTC.

[MusaMohamed]

But why not leave it on your wallet? Future trading is very risky and tempting. This can be the advantage of the margin trading, but more charges and not suitable for long term position holding.

When trading with leverages, it's not advised to hold any trading positions too long time because it's very risky. With leveraged trading positions, there are risks of liquidations which if happen will cost most of your collateral.

This liquidation risk is more dangerous and fearful than cost you have to pay to funding rates by holding your leveraged trading positions a long time. Funding rate can cost you more if you hold your position a longer time, but liquidation can cause more severe loss within shorter period of trading time.

Crypto Liquidation: What Is It And How Can You Avoid It?
The best way is don't trade with Margin and Futures.

[TheUltraElite]

You need to pay fees to keep the position open for months. I would not recommend it at all.

Rather the safer and less mental problem inducing system is the use of spot trading and avoidance of anything that is non-spot.

Exchanges will always promote these methods of trading because it is not trading but gambling on the prices of the asset, always giving the exchange more money than the trader. Try it if you wish to get some experience but dont put in too much right away. 100% of the people who try it will lose, its the truth that traders dont want to accept.

[JeffBrad12]

Any borrowing activity will charge you some fee, leverage is one of them because you borrowed money from the exchange.
If you want to let it sit idle for months or even years, nothing beats spot. You aren't charged anything and if something like 10 october happens again, you won't get liquidated.

There is no way but spot if you want maximum safety and charge free holding.

[maydna]

Take lowest position and you will be okay but the problem is no one know when the price will be on the lowest price. You can place an order and let it fills and see what happens later. But using leverage 2x/3x is good I think because that still lower position and you can stay calm for a bit if the price is not dump hard.

But if you are worry with the worst situation, you don't have to trade but just hodling your Bitcoin until the bull run comes again. We all losing value because of situation but no need to worry because if the bull run coming and pass the last ATH, the profit will be bigger.

[Oshosondy]

I don't think it's a good idea to choose non-perpetual futures because those choices have expiration dates compared to perpetual ones.
That is why they called it "perpetual." It does not expire since OP is going to hold a position for months or years; I suggest sticking with the perpetual one. Not all contracts are available for longer; usually you can see a 3-month or 6-month longer expiry date.

Yes, it has expiration date, but no funding fee. Positive funding fee are occuring often that negative funding fee, which is not suitable for long term.  You can try and calculate 0.01% funding fee for a year for $10000 deducted 3 times daily. You will see that it is not suitable at all for position holding.

Future (not perpetual) trading are created for this exact purpose. After the 6 months or 1 year of no funding fee, the position will be closed, but you can open another one. If it can be up to 1 year, I think that is enough. Just 3 times trading fee will be deducted in 3 years to open and close the position.

Perpetual is designed for short term traders.

[Peanutswar]

Actually im planning the same thing but I didnt make a cut losses instead a longer position in the futures but apparently there is a fees for every time you hodl your position for a longer time so you need to add this up somehow base on your profit and gains. Now I just have a DCA and monitor the market dips so I can make an entry every time goes down could be an opportunity than making a risk to make additional fees you dont know what the market price comes is also its a CEX so I dont think so its good to make a long term hodl to their platform safest having hodl at your wallet.

[EarnOnVictor]

But here is the thing, I want to keep the position open for a long time, like months or probably a year or two, until Bitcoin's price reaches 120K again. So, what do you suggest me to do? I don't want fees to eat my money. Is it better to open long position on futures with 2x/3x leverage or is it better to trade on Spot with 2x/3x margin? Let's say that I plan to trade on Binance or ByBit.

Start buying Bitcoin from this level can't hurt so much anymore, though it could still sell, but I don't see it going below $40,000 (give or take). So, even if it sells a little more, you continue buying. This is why you shouldn't buy all at once, you can be DCAing weekly or bi-weekly.

That's for investing. If you want to buy on futures market, just set your liquidation price to $25,000. I don't think Bitcoin can ever reach that level in this bearish season.

[cryptoaddictchie]

I think its gonna eat a lot of fees. Ive been seeing bitcoin staying quietly at 60k level. Yes we cant potentially see bitcoin lower than $40k levels but anything can happened especially if theres global issues like war or any upcoming viruses to be discover like covid.

As much as I am bullish with bitcoin, Id rather hold and dca it with spot account than carelessly have a margin position with impending crash potential. Liquidation is quite problematic even at stop loss if its too steep it could drain our balances.

[PostQuantumBTC]

That's for investing. If you want to buy on futures market, just set your liquidation price to $25,000. I don't think Bitcoin can ever reach that level in this bearish season.

I do not think bitcoin is going below $50000 but it is good to be safer, $25000 is good for the liquidation price but that means he is not going to use up to 2x if bitcoin is at $60000. If bitcoin if at $62000, the leverage for liquidation at $$25000 will be between 1.6 and 1.7x.

From my own analyses bitcoin is not going below $30000.  I have 99.999999%% assurance on this.

[el kaka22]

I am not sure if that is a good idea or not with respect to the current bitcoin market. I get that it may not look like it will go even lower, but it may and I would suggest not to do this. I think if you can, buy more bitcoin right now, so you lower your purchasing average and you can profit that way. I know that it is not going to make you a lot of profit very quickly, it will be very slow and you should wait a long time before you can profit but that is the best way to do that.

All the above, what I am not getting is, when you are ready to hold till $120k, why not extend your holding for new ATHs. I am sure that we are going to test $200k by 2029 and you can profit more. As per 4 year cycle theory, we may have $120k by end of 2027 so, risking only in spot market and planning for rigth target may help you for tension free profits.

[Royal Cap]

I feel really bad for you but to be honest, going into leverage or margin trading right now to recover your losses can be a very suicidal decision. You know, the volatility of the crypto market is so severe that there is no such thing as 100% certainty. The urge to quickly recover the 50% you lost now can put you in even greater danger.  If your goal is to really wait for one to two years, then I think spot holding is more reasonable. So as a well wisher , my advice is to never make the mistake of taking any kind of leverage. The safest strategy in the crypto market is spot holding.  Be patient and leave it in the spot when the market turns around again, your losses will also be recovered and there will be no fear of liquidation.