Spot vs. Futures Trading: Understanding the Difference

In crypto markets, spot trading involves buying or selling assets for immediate delivery at current market prices. When you trade on the spot market, you own the actual cryptocurrency, such as Bitcoin or Ethereum. In contrast, futures trading allows you to speculate on price movements without owning the asset. Futures contracts are agreements to buy or sell at a future date and price, often used with leverage to maximize gains (or losses). Spot trading is straightforward and ideal for beginners, while futures offer more flexibility and tools for advanced strategies. Both have their advantages, but understanding the risks—especially with leverage—is key to trading success.