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02

Spot: Own the Asset

Buy Bitcoin at Coinbase, hold in self-custody or an ETF. No leverage. No liquidation risk. You own the asset outright. It's slow but safe—and what institutions use.

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03

Futures: Betting on Price

Trade perpetual contracts on Binance or FTX with 5:1 to 100:1 leverage. You never own the asset. You're betting on direction. One 5% move against you = liquidation.

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04

When to Use Spot

Long-term holding (1+ years), new to crypto, risk-averse. Buy Bitcoin at $60K, hold for $100K. No daily monitoring. No stress.

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05

When to Use Futures

Short-term trading, experienced trader, want to short without borrowing. But expect 50% of retail futures traders to blow up. Use tight stops or don't trade futures at all.

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