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Note: The above exchange logo is the official website registration link, and the text is the APP download link.

In the Bitcoin market, most people who play contracts must have had their positions blown up, which has caused most people to question whether Bitcoin contracts can make money. In fact, you can make money. Before trading contracts, you must reserve contract knowledge. If you don't know anything, you can open an order, either long or short. Under the effect of high leverage, the market will be blown up and return to zero with a slight fluctuation. Therefore, it is crucial to understand the profit-making skills of Bitcoin contracts. The main skill is to learn to use Bitcoin options to hedge the risks of Bitcoin contracts. Next, the editor of the currency circle will talk about it in detail. 

 Can Bitcoin contracts make money?

Bitcoin contracts can make money, but it ultimately depends on many factors, including market price fluctuations, the type of contract you choose, trading strategies, and the overall trend of the market.

If you want to make money, you must learn about Bitcoin options. If you go long on a contract, then the option is a bearish hedge; if you go short on a contract, then the option is a bullish hedge. Although it is a risk hedge in logic, it is essentially equivalent to buying a reverse insurance. The advantage of this is that if the contract direction is right, you can directly realize profits.

If the contract goes in the wrong direction, the account can achieve capital preservation. Even if the contract is liquidated, the profit in the option direction can still cover the loss of the contract. Therefore, this is the real risk hedging, that is, risk-free arbitrage strategy.

Before trading Bitcoin contracts, study the market in depth and understand the fundamentals and technical aspects of Bitcoin. You should also continue to learn and apply technical analysis tools, such as chart patterns, trend lines, indicators (such as moving averages, relative strength index, etc.). Develop a clear trading strategy and always follow it in trading.

It is also crucial for risk management. Set clear stop loss points and profit targets to avoid potential losses. Do not invest too much money in a single transaction and maintain a moderate position size. Use reasonable leverage to avoid over-leveraged trading. And pay attention to changes in the funding rate of the contract, understand the mechanism of the funding rate, and consider its impact in your trading strategy.

 What is the difference between Bitcoin contracts and leverage?

Bitcoin contracts and leverage are two related but different concepts. They are often used together in cryptocurrency trading. Bitcoin contracts usually refer to perpetual contracts, which are a special type of derivative contracts. Unlike traditional futures contracts, perpetual contracts have no expiration date. This means that it can exist forever without closing due to expiration. Bitcoin perpetual contracts are financial instruments that can trade Bitcoin price changes.

Leverage refers to borrowing funds to invest or trade in order to magnify the proportion of investment returns or losses. In Bitcoin trading, leverage allows traders to control a larger amount of Bitcoin with a relatively small amount of capital.

For example, if you trade Bitcoin with 10x leverage, you only need to provide a margin equivalent to 10% of the value of the Bitcoin you want to trade, and the exchange provides the remaining 90%. This means that your investment returns or losses will be magnified to 10 times the actual number of Bitcoins held.

Bitcoin contracts are a financial instrument, while leverage is an investment or trading strategy. Perpetual contracts are contracts with no expiration date, while leverage is a strategy that can be applied over different time frames. Bitcoin contracts usually require a certain amount of margin, while leverage is amplified by borrowing funds to trade.

All of the above is the answer to the question of whether Bitcoin contracts can make money. Bitcoin contract trading is high-risk and can result in serious financial losses. Therefore, before participating in Bitcoin contract trading, make sure you fully understand the risks involved and carefully consider your investment goals and tolerance. In addition, in Bitcoin trading, some traders may use leverage to amplify their trades and participate in the market through Bitcoin contracts. It should be noted that the use of leverage will increase potential profits and losses, and investors must manage risks carefully.