Which is more suitable for newcomers in the crypto world?

1. Risk Level:

Spot: Maximum loss = total capital wiped out (e.g., with 1000 yuan, the maximum loss is 1000 yuan)

Contract: Possible liquidation leading to a negative balance (the higher the leverage, the greater the risk; with 10x leverage, a 10% drop results in a 100% loss). Currently, this situation is rare on major exchanges like Binance and Huobi.

2. Learning Curve:

Spot requires mastery of:

Buying and selling operations

Basic market analysis

Wallet transfers

Contracts require mastery of:

Leverage selection

Margin calculation

Liquidation price alerts

Funding rate arbitrage

3. Psychological Impact:

Spot volatility is relatively mild, suitable for developing market perception

The sharp volatility of contracts can easily lead to emotional trading (a common fatal flaw for newcomers)

2. Hidden Thresholds of Contracts (easily overlooked by newcomers)

1. Differences in Exchange Mechanisms

Full margin vs. isolated margin model

Differences between USDT-denominated and coin-denominated contracts

Differences between mark price and latest price

2. Hidden Costs

Funding rates (charged every 8 hours, long-term holding can accumulate high costs)

Slippage issues (with high leverage, even minor price differences can trigger liquidation)

3. Complexity of Strategies

Simple spot strategies: Dollar-cost averaging, partial profit-taking

Contracts require combinations: Hedging, swing trading, etc.