New Options for Bitget Coin-Margined Futures: Putting Your LSDs to Work
The cryptocurrency world is buzzing with excitement as the Shanghai Upgrade marks a significant milestone for Ethereum. As more users have begun participating in ETH staking and receiving staking rewards through service providers, there is a growing interest in new financial instruments. In this article, we will explore the latest options for Bitget Coin-Ⓜ Futures, which use Liquid Staking Derivatives (LSDs) as a margin.
The Basic Concepts
What is Coin-Margined Futures?
Coin-Margined Futures (Coin-M Futures) is a type of futures contract that is quoted and settled in cryptocurrency. Bitget Coin-Ⓜ Futures supports multiple currencies as a margin for multiple futures trading pairs.
For example: using ETH as a margin, you can now trade BTCUSD, ETHUSD, and EOSUSD with profit and loss calculated in ETH. This trading method offers you more trading options and the ability to leverage your positions.
For more information on Coin-Margined Futures on Bitget, refer to The Ultimate Guide to Bitget’s Coin-Margined Futures.
What is LSD?
Liquid Staking Derivatives (LSDs) are tokens that represent an equivalent value to the staked asset without having to wait for the staking period to end.
How does it work, you may ask?
Suppose that you have 5 ETH and want to stake it for a year. Instead of locking it up in a smart contract and waiting for a year to pass, you could deposit it into a liquid staking derivative contract. This would give you a token that represents your staked ETH (rETH, for example), which you can then trade on the market. If the price of ETH goes up during that year, the value of rETH will also go up. And if you want to unstake your ETH early, you can simply sell rETH on the market and receive the full value of your original stake.
New Options for Bitget Coin-Margined Futures: LSDs as Margins
Bitget is now the dominating crypto derivatives trading platform with multiple innovative products. Among our offerings, Bitget Coin-Ⓜ Futures stands out as a unique product specifically designed for crypto-geeks. To bring a better trading experience to users, Bitget has introduced a new option to Coin-Ⓜ Futures. Liquid staking derivatives are now available as margins for futures trading on the platform. Currently, Bitget supports stETH as collateral, but there are plans to expand support to other LSDs in the future.
stETH (Lido Staked Ether) is a token that represents staked ETH in Lido. Essentially, 1 stETH is equivalent to 1 ETH and can be used for trading, lending, and other DeFi activities.
This new feature allows users to take both long and short positions on BTC, ETH, and other Coin-Ⓜ Futures, with the profits and losses settled in stETH if they choose to use it as their collateral. For those who use ETH as their margin, the profits and losses will be settled in ETH instead.
Currently, there are 9 Coin-Ⓜ Futures pairs using stETH as margin on Bitget
For example: Tom trades BTCUSD Coin-Ⓜ Futures on Bitget.
Tom expects that BTC prices will rise and therefore buys a 1 BTC long futures contract at a price of $30,000. He would need to deposit a margin amount in stETH, let's say 0.4 stETH ($500) as collateral, to cover the contract. If the price of BTC increases to $40,000 by the expiration date, Tom would make a total profit of $40,000-$30,000 = $10,000 calculated in stETH.
On the other hand, if the price of BTC falls to $20,000 by the expiration date, Tom would experience a loss of $30,000-$20,000 = $10,000 calculated in stETH. If Tom’s margin level falls below the required margin maintenance level, he may be required to add more stETH as collateral to his margin account to maintain the required margin level, or his position may be liquidated.
The Advantages of Using LSDs as Margin on Bitget Coin-Margined Futures
Using LSDs as a margin offers multiple benefits for cryptocurrency traders. One key advantage is the ability to continue earning staking rewards while also leveraging staked assets for trading purposes. This is because LSDs provide a way to access the liquidity of staked assets without having to unstake them, making it an excellent option for users who want to maintain their staking positions for the long term while having access to trading liquidity.
Another significant benefit of using LSDs as a margin is the increased flexibility and diversification it offers traders. By providing an additional option for collateral, it can help manage risk more effectively and potentially offer a more efficient way to use staked assets for trading. This feature can be especially advantageous for traders looking to expand their trading strategies beyond holding or staking cryptocurrencies.
Using LSDs as a margin can also increase the liquidity of staked assets. By earning staking rewards while providing liquidity for trading, LSDs can help create a more vibrant trading ecosystem and potentially increase the overall value of staked assets.
How to transfer stETH to your Coin-Ⓜ Futures account?
To use stETH as collateral for LSDETH Coin-Margined Futures, you need to transfer stETH from your spot account to your Coin-Ⓜ Futures account. There is no fee for internal transfers.
- For web users
Visit Bitget website and create a new account or log in to your existing one. Next, select ‘Futures Account’ under the Asset icon.
Click on ‘Transfer’ and select ‘stETH’ to transfer into your Coin-Ⓜ Futures account.
Enter the amount and click ‘Confirm’.
After completing the transfer process, you can head to Dashboard to view your asset.
- For app users
Log into your Bitget account and tap ‘Asset’ on the homepage.
On the ‘Futures’ tab, click on ‘Transfer’ and select ‘stETH’ to transfer into your Coin-Ⓜ Futures account.
Enter the amount and click ‘Confirm transfer’.
After completing the transfer process, you can head to Asset-Futures to view your asset.
Disclaimer: All investment strategies and investments are subject to the risk of loss. Nothing contained in this article should be construed as investment advice.
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