When diving into the world of cryptocurrency derivatives, understanding the nuances between different types of futures contracts is essential. Two popular options available on major exchanges are USDT-M futures and Coin-M futures. While both allow traders to speculate on price movements with leverage, they differ significantly in settlement, margining, and strategic use. This guide breaks down everything you need to know about these contract types, helping you make informed decisions based on your trading goals and asset holdings.
What Are USDT-M Futures?
USDT-M futures, often referred to as linear futures, are denominated and settled in stablecoins—primarily USDT (Tether). On platforms like MEXC, both the quote currency and settlement occur in USDT, making profit and loss calculations straightforward and stable.
👉 Discover how USDT-M futures can simplify your trading strategy
For traders who prefer a fiat-like experience in crypto markets, USDT-M contracts offer a clear advantage: your returns are measured in a stable unit. This makes it easier to track performance without worrying about volatility in the underlying margin asset.
These contracts support high leverage—up to 500x on certain pairs—and come with hundreds of available trading pairs across altcoins and major cryptocurrencies. Whether you're trading BTC/USDT or a smaller-cap altcoin, USDT-M futures provide broad market exposure with predictable accounting.
What Are Coin-M Futures?
In contrast, Coin-M futures, also known as inverse futures, are settled in cryptocurrency rather than stablecoins. For example, a BTC/USD futures contract under the Coin-M model would be margined and settled in BTC. If you profit from a short position, you receive more BTC; if you lose, you pay out in BTC.
Currently, exchanges like MEXC offer Coin-M futures for major assets such as BTC-margined and ETH-margined contracts. One of the standout benefits of this model is capital efficiency—you can trade without converting your crypto holdings into stablecoins.
This is particularly valuable during bullish market phases when investors want to avoid selling their long-term crypto positions. Instead of cashing out at potentially low prices, they use their existing BTC or ETH as collateral to open leveraged positions.
Key Differences at a Glance
To clarify the distinctions, here’s a breakdown of the core features:
Contract Type
- USDT-M Futures: Linear pricing; quoted and settled in USDT.
- Coin-M Futures: Inverse pricing; margined and settled in native crypto (e.g., BTC, ETH).
Settlement & Margin
- With USDT-M, all aspects—from entry to exit—are handled in USDT. This simplifies risk management and aligns well with traders focused on stable value tracking.
- With Coin-M, your gains and losses directly affect your crypto balance. A winning trade increases your BTC or ETH holdings, compounding your long-term accumulation strategy.
Leverage Options
Both contract types support flexible leverage models:
- Isolated margin: Limits risk to a specific position.
- Cross margin: Shares equity across positions for better liquidation resistance.
Despite structural differences, neither type restricts holding duration—both allow unlimited holding periods, ideal for swing traders and long-term speculators.
How to Access USDT-M and Coin-M Futures
Navigating between these two futures types is simple on modern exchange platforms.
On Desktop (Web)
- Visit the exchange website and click on the [Futures] tab in the top navigation.
Choose either:
- USDT-M Perpetual Futures
- Coin-M Perpetual Futures
- Alternatively, if already on the futures trading interface, click the dropdown next to the trading pair (usually marked with a ▼) and switch between USDT-M and COIN-M modes.
On Mobile App
- Open the app and tap [Futures] at the bottom menu.
- At the top of the futures trading screen, toggle between USDT-M and COIN-M to access the respective markets.
This seamless switching allows traders to manage multiple strategies across contract types from a single interface.
When Should You Use USDT-M Futures?
Consider USDT-M futures if:
- You hold most of your portfolio in stablecoins.
- You want simple P&L tracking without crypto volatility affecting margin value.
- You’re trading highly volatile altcoins and prefer stability in your base currency.
- You seek access to a wide range of trading pairs with up to 500x leverage.
These contracts are ideal for short-term traders, scalpers, or those entering crypto trading with fiat-equivalent instruments.
👉 See why traders choose linear futures for precision and clarity
When Should You Use Coin-M Futures?
Opt for Coin-M futures when:
- You’re a long-term holder of BTC or ETH and don’t want to sell.
- You wish to hedge your existing crypto portfolio against downside risk.
- You aim to accumulate more crypto over time through profitable trades.
- You're comfortable with inverse P&L mechanics where profits increase your crypto balance.
During bull runs, many investors favor Coin-M contracts because winning trades add directly to their crypto stash—effectively letting them "buy more" without spending additional capital.
Frequently Asked Questions (FAQ)
What is the main difference between USDT-M and Coin-M futures?
The key difference lies in settlement and margining: USDT-M futures use stablecoins (like USDT), while Coin-M futures use cryptocurrencies (like BTC or ETH) for both margin and settlement.
Can I trade altcoins using Coin-M futures?
Currently, most exchanges only offer Coin-M futures for major coins like BTC and ETH due to liquidity and volatility considerations. Altcoin trading is typically limited to USDT-M contracts.
Which contract type has higher leverage?
Both support high leverage—up to 500x depending on the asset and platform. Leverage limits depend more on the specific trading pair than the contract type.
Do I need to own crypto to trade USDT-M futures?
Yes, but only USDT. You don’t need BTC or ETH—just sufficient USDT in your futures wallet to cover margin requirements.
Are funding rates different between USDT-M and Coin-M?
Funding rates vary by market demand and are calculated independently for each contract type. However, the mechanism remains similar: periodic payments exchanged between longs and shorts.
Which one is better for beginners?
USDT-M futures are generally more beginner-friendly due to stable pricing, easier profit calculation, and wider availability across trading pairs.
Final Thoughts
Choosing between USDT-M and Coin-M futures ultimately depends on your asset allocation, risk tolerance, and trading objectives.
If you value simplicity, stability, and broad market access, USDT-M futures are likely your best bet. But if you're a committed holder of Bitcoin or Ethereum looking to trade without liquidating your stack, Coin-M futures unlock powerful capital-efficient strategies.
Understanding these tools empowers you to trade smarter—whether you're hedging, speculating, or building long-term wealth in crypto.