When you open the Derivatives menu on the Binance Official Website, you will see two side-by-side entries: "USDⓈ-M Futures" and "COIN-M Futures." Similarly, in the Binance Official App, these appear as two distinct tabs within the "Futures" section at the bottom. Simply put, USDⓈ-M futures use stablecoins like USDT or USDC as margin, with profits and losses directly converted into USD values. COIN-M futures use the cryptocurrencies themselves (such as BTC or ETH) as margin, with P&L settled in the quantity of those tokens. If you are just starting with Binance futures and do not plan to hold tokens long-term, USDⓈ-M is generally more intuitive. COIN-M is better suited for users who want to HODL BTC while earning more of it. If you haven't installed the app yet, you can refer to our iOS Installation Guide to get the client ready.

I. The Fundamental Difference Between USDⓈ-M and COIN-M Futures

The most essential difference lies in the "Margin Currency" and "Settlement Currency." In USDⓈ-M futures, all margin, P&L, and transaction fees are denominated in USDT or USDC. Since 1 USDT is roughly equal to 1 USD, the price is stable, meaning your account balance fluctuations only come from the unrealized P&L of the contracts themselves. In contrast, COIN-M futures use the underlying cryptocurrency as margin—to trade BTC contracts, you must deposit BTC; to trade ETH contracts, you must deposit ETH. P&L is settled by increasing or decreasing the number of those specific tokens.

Let’s look at a clear example. Suppose you open a 1x Long BTC position, and the price rises 10% from $60,000 to $66,000:

  • In USDⓈ-M Futures: Your account gains USDT equivalent to the "Quantity × $6,000." This newly earned USDT will not change in value regardless of future BTC price movements.
  • In COIN-M Futures: Your account gains a small fraction of BTC. However, this new BTC continues to fluctuate with the market. If the BTC price drops back to $60,000, the USD value of your profit will shrink.

In other words, USDⓈ-M futures lock in the USD value, while COIN-M futures allow you to earn more tokens, but the USD value of those tokens remains exposed to market volatility.

II. Comparison Table of Futures Structures

Feature USDⓈ-M Futures COIN-M Futures
Margin Currency Stablecoins (USDT, USDC, etc.) Underlying tokens (BTC, ETH, BNB, etc.)
Settlement Currency USDT/USDC The underlying token itself
Contract Face Value 1 Unit = 0.001 BTC (divisible), Flexible 1 Unit = $100 (BTC contracts), Fixed
Suitable for Shorting Yes, earns USDT profits Possible, but earns tokens that might lose value
Suitable for Longing Ideal for short-to-medium term speculation Ideal for long-term believers in the token
Hedging Spot Drops Easy to understand using stablecoins Locks in USD value of spot via shorting
Funding Fee Currency USDT/USDC The underlying token
Beginner Friendliness High, everything is shown in USD Moderate, requires understanding of token quantity logic
Market Liquidity Extremely strong, deepest for main pairs Strong for BTC/ETH; weaker for long-tail tokens

III. Who Should Use USDⓈ-M Futures?

USDⓈ-M futures are suitable for three types of users. First are those who use futures as a short-term trading tool, aiming to achieve USD profits with minimal capital and without caring about owning the actual tokens. Second are those who only want to short or hedge risk; by shorting BTC in USDⓈ-M, you earn USDT, ensuring your gains aren't dragged down by a plummeting BTC price. Third are users trading multiple coins simultaneously. With USDⓈ-M, you only need one margin type (USDT) to switch between dozens or hundreds of trading pairs like BTC, ETH, SOL, and DOGE without needing to hold the spot for each one.

From an operational standpoint, all P&L figures in USDⓈ-M are in USD units, making it feel like a traditional financial account. This makes calculating P&L against price charts much more direct. For beginners who haven't yet established a "coin-standard mindset," using USDⓈ-M significantly reduces the probability of making mistakes.

IV. Who Should Use COIN-M Futures?

COIN-M futures are better suited for users who are bullish on a specific token long-term and already hold that token in their spot account. They offer two unique values:

First is the "Earn Tokens, Not Just USD" preference. If you firmly believe BTC will rise long-term and want to increase your BTC holdings, COIN-M futures allow you to use BTC as margin and have your P&L directly increase your BTC count. In a bull market, you get a "double win" from both price appreciation and quantity growth.

Second is "Locking in the USD Value of Tokens." Suppose you hold 10 BTC long-term and don't want to sell, but you are worried about a short-term dip. You can open an equivalent short position in COIN-M futures. As BTC falls, your short position earns more BTC, offsetting the USD loss of your spot holdings. Your total BTC count stays the same or slightly increases, effectively hedging your spot risk. This is the most common use case for miners and large holders.

Note: Since the margin itself fluctuates in price, liquidation price calculations are less intuitive. When BTC drops, your margin's USD value also shrinks, making COIN-M futures slightly more susceptible to liquidation during sharp downturns compared to USDⓈ-M.

V. Differences in Liquidation and Funding Rates

The liquidation logic is the same for both: you are liquidated when your maintenance margin rate is insufficient. However, because the margin currencies differ, the experience varies.

In USDⓈ-M futures, when the BTC price drops, your USDT margin value remains constant; only the contract position itself incurs a loss. Thus, the liquidation price only depends on the contract. In COIN-M futures, when the BTC price drops, you face a "double hit": the position loses value AND the margin itself depreciates. Under the same 10x leverage, COIN-M futures actually have slightly less resilience against price drops than USDⓈ-M.

As for funding rates, both are collected every 8 hours (around 00:00, 08:00, and 16:00 UTC). The rate is determined by market supply and demand: when bulls are dominant, they pay bears, and vice versa. USDⓈ-M uses USDT for these payments, while COIN-M uses the underlying token. Funding rates for COIN-M can sometimes be higher due to lower liquidity, so long-term holding costs should be carefully calculated.

VI. Choosing Your First Contract as a Beginner

For your first trade, it is highly recommended to choose USDⓈ-M BTCUSDT or ETHUSDT Perpetuals. Here are four reasons why:

Step 1: Simple Margin Management

You only need to transfer USDT from your Spot wallet to your Futures wallet. You don't need to buy BTC in the spot market first, which saves you an extra step and additional transaction fees.

Step 2: Intuitive P&L

The numbers in your account are directly in USD. Earning 50 USDT means earning $50; losing 30 USDT means losing $30. For beginners building a trading system, this direct feedback is crucial.

Step 3: Best Liquidity

BTCUSDT Perpetuals are among the most liquid contracts globally. This means low slippage and fast execution, ensuring your stop-loss and limit orders are generally filled at your desired prices.

Step 4: Small-Scale Testing

We recommend starting with only 50-100 USDT and 2-3x leverage. Go through all the functions—market orders, limit orders, stop-loss/take-profit, and closing positions—before increasing your size. If you haven't set up your account yet, you can refer to the risk management principles in About BabiaHub.

VII. FAQ

Q: Can I hold both USDⓈ-M and COIN-M futures positions at the same time? A: Yes. On Binance, the two types of contracts are independent. Their funds are managed separately and do not affect each other. However, remember that you must deposit margin into each account separately.

Q: What is the difference between using USDC and USDT for USDⓈ-M margin? A: Essentially, they are the same—both are stablecoins worth $1. USDC might have fee discount promotions for certain pairs, but USDT generally offers better liquidity.

Q: Can I use other tokens as margin for COIN-M futures? A: No. A BTC contract must use BTC as margin, and an ETH contract must use ETH. This is completely different from USDⓈ-M's unified margin (where USDT is universal).

Q: Can I trade COIN-M if I only have a small amount of tokens? A: Theoretically yes, but since contract face values are fixed (e.g., 1 BTC COIN-M contract = $100), small accounts may be limited in the number of contracts they can open, making position management less flexible than in USDⓈ-M.

Q: If I am liquidated in COIN-M, will I lose all my margin tokens? A: Like USDⓈ-M, you only lose the margin specifically tied to that position. Any unused margin in your account will remain. Please refer to the liquidation mechanism for specific loss details.

Q: For a long-term strategy, should I buy spot or use COIN-M futures? A: Spot is generally recommended. Futures (including COIN-M) involve leverage and liquidation risks, plus you must pay funding fees. Spot is the optimal choice for "long-term conviction" HODLing, while futures are better for specific needs like hedging or arbitrage.

Futures trading is a high-risk derivative activity. Capital can go to zero in a very short time during high volatility. Whether you choose USDⓈ-M or COIN-M, we recommend starting small, using strict stop-losses, and reading our Disclaimer before participating.