Many newcomers to the cryptocurrency world are often confused at their first step:

Should I trade spot or play contracts?

Which one is easier to make money? Which one is more likely to get liquidated?

Today, I will explain it in the simplest terms 👇

First, the conclusion:

If you want to survive long-term: trade spot

If you want to double your money quickly, but might also lose everything overnight: play contracts

1. What is 'Spot'?

You buy coins with money, and the coins are yours.

For example, if you use 1000 USDT to buy BTC, then you hold Bitcoin,

If it rises, you profit; if it falls, you lose, but you won't face 'liquidation', the coins are still in your account.

Suitable for: newcomers, small position investors, and those who are optimistic about a certain project in the long term.

2. What is 'Contract'?

You don't need to buy coins, just bet on whether the price will go up or down, with leverage, and can be liquidated at any time.

Contract trading is essentially a directional bet + leveraged amplification,

Using 10x leverage to go long on BTC, if it rises by 1%, you earn 10%,

but if it falls by 1%, you might get liquidated and lose everything.

Suitable for: stable-minded, experienced, and knowledgeable short-term traders.

3. Key Comparison Table

Project Spot Contract

Hold Assets Yes (real purchase of coins) No (betting direction)

Leverage None Supports high leverage

Profit and Loss Mechanism Rise and fall = profit and loss Trend direction = profit

Liquidation Risk No liquidation Highly prone to liquidation

Suitable for: Newcomers / Long-term Experienced / Short-term

Common mistakes made by newcomers:

Seeing others make quick money with contracts, impulsively entering → liquidation

No position management, going all in → consecutive losses

Emotional control leads to over-leveraging → losing more and betting more

My advice:

If you are new to the space, please start with spot trading, and gradually build your understanding of market trends, positions, and candlestick charts.

Don't listen to others saying '10x profits', what others gain is what you lose.

Trading cryptocurrencies is not about speed, but about understanding + mindset