Is it a good idea to invest a small amount of capital in BTC via the futures mar

[Humblevirus]

right now my income isn't high so buying one or two whole bitcoins on the spot market isn't feasible for me. However, I’ve had an idea: what if I invest a small amount of money to buy BTC using leverage—say, 10x—to generate significant profits, and then hold it for the long term, selling during the next bull run (for instance, at a price above $200k)? What do you all think? Is this a good solution for someone with limited capital? While the spot market is comfortable, given my small budget, I’m considering buying BTC on the futures market using a leverage ratio that I deem safe 

Even without using leverage to buy Bitcoin, your consistency can lead to having a reasonable portfolio by always accumulating. Or why can't you just think of having another source of income, so your earnings can increase and likely you will just increase the amount you use to accumulate Bitcoin using to be accumulating?And once again, it is not only holding a big number of Bitcoin that can guarantee reasonable profit in the future, the period of time you hold it also matters. There are some early investors that had like 50 Bitcoin or more, and some had less than 30 BTC. But those who had 50 BTC sold their Bitcoin early, while those who had less are still holding are they are in serious profit that we can't compare with those that sold early because holding for a longer period of term so generate more profitable than short period,the more someone hold Bitcoin it likey the more it will be profitable.

[tvplus006]

right now my income isn't high so buying one or two whole bitcoins on the spot market isn't feasible for me. However, I’ve had an idea: what if I invest a small amount of money to buy BTC using leverage—say, 10x—to generate significant profits, and then hold it for the long term, selling during the next bull run (for instance, at a price above $200k)? What do you all think? Is this a good solution for someone with limited capital? ..

Are you sure that after buying bitcoin on the futures market, the price will rise without a rollback? After all, it may happen that your position will be liquidated before the price reaches 200k bucks. In addition, you should not forget about funding, as in the end it can eat up your entire profit.

[Webutxo]

There should be different between bitcoin holders and traders. If you are to hold bitcoin, there is no need to take the risk of using leverage, you should rather buy and hold your bitcoin in your wallet without leverage; you will still make your profit with the investment if you are holding for long, and you can buy more to the wallet if you have another money to buy more.

If you want to trade, using low leverage is good, it will prevent you from losing your capital easily, but you still need to have the knowledge to use leverage and how to trade.

I think OP didn't know what he want. If he want to be Bitcoin holder, that's fine and if he want to be a trader he should pick one side. I will prefer if he stick with holding Bitcoin and leave the trading but I'm not discouraging him, if he wish to be a trader and have the time to trader, then that's fine but he should know that there are no quick way to make money from trading especially the path he want to follow, futures is very difficult to make money.

Many crypto future traders are not into profits, they are just there doing their best, they are like typical gamblers that makes money and lose it the next day that's why you see people that when they make their first trade wit futures, they don't try it again because they lose everything. It will be interesting if OP can try doing spot trading as a start, it's even better than and safer than the futures he is trying to start.

[CageMabok]

...

There should be different between bitcoin holders and traders. If you are to hold bitcoin, there is no need to take the risk of using leverage, you should rather buy and hold your bitcoin in your wallet without leverage; you will still make your profit with the investment if you are holding for long, and you can buy more to the wallet if you have another money to buy more.

If you want to trade, using low leverage is good, it will prevent you from losing your capital easily, but you still need to have the knowledge to use leverage and how to trade.

Your advice about having knowledge on leverage trading is indeed good, but every trader also needs to understand that having knowledge won't always save them from losses in the market. Because even trading without leverage can still result in losses, even if you don’t immediately lose everything, so any trader should still be careful and pay close attention when trading with leverage. As for investments like you mentioned, that’s already pretty common knowledge for everyone because most investors who like to buy Bitcoin for long-term holdings will obviously be happy to keep buying Bitcoin since the funds are generally set aside specifically for that.

[masulum]

I think OP didn't know what he want. If he want to be Bitcoin holder, that's fine and if he want to be a trader he should pick one side. I will prefer if he stick with holding Bitcoin and leave the trading but I'm not discouraging him, if he wish to be a trader and have the time to trader, then that's fine but he should know that there are no quick way to make money from trading especially the path he want to follow, futures is very difficult to make money.

it's very clear at OP Post, he wants generate higher profits from futures trading and holding his positions after success entry till bullish coming. However, this is misunderstood the concepts of "holding" and "trading", and you already mentioned it.  He seem to think "holding" strategy refers to holding positions in futures, rather than holding the actual coins in a personal wallet. Furthermore, he also mentioned "trading" while proposing 10x leverage on his entry, of course this is a high-risk approach, as maintaining a leveraged position over the long term without a stop-loss order could drained his money if his position take wrong entry or market reversal deeper than he think. If the goal is to hold Bitcoin, the safest method is spot trading, not futures trading, we know that. but, in current situations, most people just thinking about instant profit with leverage without thinking about the risk. but, in the end he must take responsible with his posiition and money.

[Hamza2424]

All your profit will be eat by funding fees; the trading fee is just a one-time fee for makers and takers.

Yep, the funding fee can eat a lot of his capital in just 1 year, and if he holds the trade for longer, then he can lose more, but I don't think all of his profit will be eaten by the funding fee, because let's say the funding fee is at least +0.01% every eight hours, and count that 3 times a day for a whole year, although it increases with time if the asset is too volatile.

So if the capital is $1000 and the leverage is 10x, the +0.01% fee would be around $1, and per day it can be around $3. For a whole year, it can be at least $1100. But if he is able to make 20% in that year, his net profit would be at least $1000.

I am making these numbers on one assumption that the funding fee stays the same at +0.01%. If not, then the profit and loss can increase. And just to make it clearer, and relevant to your first statement, if BTC moved only 5% in a year, then the trader would have a net loss of around $600.

[jossiel]

Someone who is even unsure if this is a good idea or not and asks if it's going to be profitable on his end needs to stop this plan.

I'm sorry to say that it won't make sense for anybody to continue just as OP if ever the want to think of going with futures with the hope that it will grow tremendously.

What we see in social media are fake or just to chase for the clout. A small amount is okay if you like to put that into risk but what if that small amount is all that you have got for that risk? might just hold it in bitcoin and continue with smaller amounts in accumulation.

[Rengga Jati]

Let me ask you one thing. How much are you earning from your signature campaign? $50?

My first campaign was not even half that but I exchanged every alt I got in the sig and kept every satoshi after at the time.

It looks like he isn't participating in any signature campaigns yet. So he's likely funding it with his real-life income. I’m doing the same thing, trying to hold onto my campaign earnings for the long term. right up until the bull run. Unless, of course, an urgent, unavoidable need arises. Otherwise, it's better to keep holding while continuing to accumulate more by setting aside money from my real-life job.

However, I’ve had an idea: what if I invest a small amount of money to buy BTC using leverage—say, 10x—to generate significant profits, and then hold it for the long term, selling during the next bull run (for instance, at a price above $200k)? What do you all think?

The potential returns in this scenario certainly look very tempting. if the leverage strategy in the futures market succeeds, the outcome could be highly promising. But, don't just focus on the potential profits! Consider the risks! Entering the futures market carries significant risk. Especially with high leverage. With 10x leverage? So, the liquidation increases 10x, too. If the market moves against your position. And that risk intensifies as the price of BTC drops or moves in the opposite direction. Did you factor that into your calculations?

[BitMaxz]

Yep, the funding fee can eat a lot of his capital in just 1 year, and if he holds the trade for longer, then he can lose more, but I don't think all of his profit will be eaten by the funding fee, because let's say the funding fee is at least +0.01% every eight hours, and count that 3 times a day for a whole year, although it increases with time if the asset is too volatile.

So if the capital is $1000 and the leverage is 10x, the +0.01% fee would be around $1, and per day it can be around $3. For a whole year, it can be at least $1100. But if he is able to make 20% in that year, his net profit would be at least $1000.

I am making these numbers on one assumption that the funding fee stays the same at +0.01%. If not, then the profit and loss can increase. And just to make it clearer, and relevant to your first statement, if BTC moved only 5% in a year, then the trader would have a net loss of around $600.

Well, funding fees spike sometimes; it's not fixed to 0.01%. Sometimes they are the ones who pay you, but the problem is we know the price would rise, so expect to pay more in funding fees than earn from it.

I never tried to hold a position for more than 2 weeks; even holding a position to 1 year this is why I can't give you an example calculation because I just also ask this to other traders on the forexfactory forum. Bitcoin is very volatile; there are times that the price jumps that could lead your funding fees high, and you need to pay it every 8 hours.

That is why I do not recommend holding a position too long, more than 6 months; if you are planning to hold it, then choose non-perp orders or offers with expiry on futures. Even if you hold them until the contract expires they don't ask for funding fees.

[Hamza2424]

Well, funding fees spike sometimes; it's not fixed to 0.01%. Sometimes they are the ones who pay you, but the problem is we know the price would rise, so expect to pay more in funding fees than earn from it.

I never tried to hold a position for more than 2 weeks; even holding a position to 1 year this is why I can't give you an example calculation because I just also ask this to other traders on the forexfactory forum. Bitcoin is very volatile; there are times that the price jumps that could lead your funding fees high, and you need to pay it every 8 hours.

That is why I do not recommend holding a position too long, more than 6 months; if you are planning to hold it, then choose non-perp orders or offers with expiry on futures. Even if you hold them until the contract expires they don't ask for funding fees.

I have also never held a single futures trade for more than 2 days. So I also can't be 100% confirmed about these numbers, but this calculation has given some idea that even if the funding rate spikes a bit up, we can lose more than we can think, and we need more than a 50% pump in the price of Bitcoin if we really want to make a good profit. But it is not possible to make 50% in one year, so we may have to hold the position for another year.

Or maybe three years, it depends when we are entering. I would say, if we enter now, we have to wait at least 2 years to see a 50% pump for sure, although we can see 50% in one year, but I wouldn't bet on the best case scenario.

If we can find the average of the funding fee, then we can easily calculate the time we need to hold the position, the amount we need, and how much leverage we should take.

[slaman29]

Let me ask you one thing. How much are you earning from your signature campaign? $50?

My first campaign was not even half that but I exchanged every alt I got in the sig and kept every satoshi after at the time.

It looks like he isn't participating in any signature campaigns yet. So he's likely funding it with his real-life income. I’m doing the same thing, trying to hold onto my campaign earnings for the long term. right up until the bull run. Unless, of course, an urgent, unavoidable need arises. Otherwise, it's better to keep holding while continuing to accumulate more by setting aside money from my real-life job.

Ah you're right, I was assuming a lot, but I suppose if some people like OP are trading futures then they don't need a signature to earn, I was however hinting at my own DCA activities in the past, all started with bad experience in trading especially with alts, then realizing if I just saved my sig money, I didn't have to trade. Stuck around the forum for the friends, lived my life to the fullest, and never looked back!

I think you have the right spirit too. Hope OP comes back to reply, but doesn't look good