Best Inverse Perpetual Contract Exchanges
In this guide, we overview and compare the 5 best inverse perpetual exchanges that allow you to fund contracts with crypto assets. Find the safest, most liquid and best overall platform.
Summary: Inverse perpetual contracts have become a popular trading type for sophisticated investors looking to get leverage on their crypto assets, or hedge their portfolio. In an inverse perpetual contract, the value of the contract is denominated in the underlying cryptocurrency itself. This means that the profit or loss on the contract is settled in Bitcoin, rather than in US dollars or another fiat currency.
In this article, we will be looking at the top 5 best inverse perpetual contract exchanges in the crypto market. These exchanges have been chosen based on factors such as trading volume, security, user experience, and trading fees:
1. Bybit
Bybit is the most popular cryptocurrency derivatives exchange that offers a variety of trading options including inverse perpetual contracts. Bybit's inverse perpetual trading feature allows traders to take long or short positions on cryptocurrencies like Bitcoin, Ethereum and 150 other popular coins with up to 100x leverage.
Bybit offers the most competitive fee structure for inverse perpetual contracts, with a 0.01% taker fee and -0.025 maker rebate. They also have a great user interface and make the trading process very easy and intuitive. In addition, they offer high security & audited proof-of-reserves, a robust customer service team, and features like partial order execution and market hedging.
2. Binance
Binance is one of the largest and most popular cryptocurrency exchanges in the world, with a wide range of trading options, including inverse perpetual contracts (which they refer to as Coin Margined or Coin-M contracts). The exchange offers traders the ability to take long or short positions on a variety of digital assets, with leverage of up to 25x.
Binance's inverse perpetual contracts are settled in the underlying cryptocurrency and offer low trading fees, with a 0.02% maker fee and a 0.04% taker fee. The exchange also offers a range of order types, including limit, market, stop-limit, and take-profit orders, as well as a customizable trading interface.
3. Phemex
Phemex is a relatively new but fast-growing cryptocurrency derivatives exchange that specializes in perpetual contracts, including inverse perpetual contracts (they also refer to these contracts as Coin Margined or Coin-M contracts). The exchange offers a range of cryptocurrencies to trade, including Bitcoin, Ethereum, and Litecoin, with leverage of up to 100x.
The platform's inverse perpetual contracts are settled in the underlying cryptocurrency and offer low trading fees, with a 0.075% taker fee and a -0.025% maker rebate. The exchange also offers a range of order types, including limit, market, stop-limit, and take-profit orders, as well as a customizable trading interface.
4. BitMex
BitMEX is one of the oldest and most established cryptocurrency derivatives exchanges, with a focus on institutional investors and experienced traders. The exchange offers a range of trading options, including inverse perpetual contracts on Bitcoin, Ethereum, and other digital assets, with leverage of up to 100x.
BitMEX's inverse perpetual contracts are settled in Bitcoin and offer low trading fees, with a 0.075% taker fee and a -0.025% maker rebate. The exchange also offers a range of advanced trading features, including order types such as limit, market, stop-limit, and take-profit orders, as well as a customizable trading interface.
5. DYDX
dYdX is a decentralized cryptocurrency derivatives exchange that offers a variety of trading options, including inverse perpetual contracts, on a permissionless and trustless platform. As a decentralized exchange, dYdX does not hold user funds or require KYC verification, making it a popular option for traders who value privacy and control over their assets.
dYdX's inverse perpetual contracts are settled in the underlying cryptocurrency and offer leverage of up to 25x. The exchange also offers a range of order types, including limit, market, and stop-loss orders, as well as a customizable trading interface. As a decentralized exchange, dYdX relies on smart contracts to facilitate trades, which are executed on the Ethereum blockchain. This means that trades are transparent, secure, and immutable, and cannot be manipulated by the exchange or any other third party.
What is the difference between perpetual and inverse perpetual?
Perpetual contracts are a type of derivative contract used in cryptocurrency trading that do not have an expiration date, and are settled in cash. They allow traders to take long or short positions on the price of a cryptocurrency without actually owning the underlying asset. The value of the contract is often denominated in US dollars or another fiat currency.
Inverse perpetual contracts are a specific type of perpetual contract that are settled in the underlying cryptocurrency, rather than in a fiat currency. They allow traders to take long or short positions on the price of a cryptocurrency, with leverage, and profit from both upward and downward price movements. In an inverse perpetual contract, the trader is essentially betting on whether the price of the cryptocurrency will go up or down. If the price goes in the direction of the trader's bet, they will make a profit, and if it goes against their bet, they will incur a loss.
What is a Coin Margined (Coin-M) Contract?
A Coin Margined (Coin-M) Contract is a type of cryptocurrency derivatives contract that allows traders to speculate on the price movements of digital assets, such as Bitcoin, using leverage. Coin-M contracts are essentially the same thing as inverse perpetual contracts, but they are sometimes referred to by different names depending on the exchange.
What are the fees to hold an inverse perpetual contract?
The fees to hold an inverse perpetual contract can vary depending on the specific exchange, the cryptocurrency being traded, and the size of the position. Traders should carefully review the fee schedule of each exchange before they begin trading to ensure that they understand the costs involved.
Here is a list of some common fees that traders may encounter when trading inverse perpetual contracts:
- Trading Fees: These are fees charged by the exchange for each trade executed. Trading fees can vary depending on the exchange, the trading volume, and the trading pair. Trading fees can range from 0.02% to 0.075% of the notional value of the trade.
- Funding Rate: This is a periodic fee that is used to ensure that the price of the contract stays in line with the underlying asset. The funding rate is typically paid by the traders who are in the minority position. The funding rate can vary depending on the exchange and the cryptocurrency being traded.
- Withdrawal Fees: These are fees charged by the exchange for withdrawing cryptocurrency from the exchange to an external wallet. Withdrawal fees can vary depending on the exchange and the cryptocurrency being withdrawn.
- Deposit Fees: These are fees charged by the exchange for depositing cryptocurrency into the exchange. Deposit fees can vary depending on the exchange and the cryptocurrency being deposited.
Final Thoughts
In conclusion, inverse perpetual contracts are becoming an increasingly popular trading option for sophisticated investors looking to get leverage on their cryptocurrency assets or hedge their portfolios. The popularity of these contracts has led to the emergence of a variety of exchanges that offer different features, fees, and user experiences.
In this guide, we have outlined the top 5 best inverse perpetual contract exchanges, based on factors such as trading volume, security, user experience, and trading fees. Each of these exchanges has its own strengths and weaknesses, so traders should carefully consider their options before deciding where to trade.
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