As the most widely issued and circulated stablecoin, USDT maintains a "stable" price, making it unsuitable for speculative purposes. However, its massive user base renders it a critical asset in the crypto ecosystem.
USDT has recently drawn attention for two key reasons:
- Its dramatic premium during Bitcoin price crashes.
- Its unlimited issuance mechanism.
Understanding USDT Perpetual Contracts
Developed by BTSE Exchange, the USDT perpetual contract is a rare product in today's market. Unlike common BTC/USDT or ETH/USDT contracts (which use USDT for pricing/settlement), the USDT/USD contract treats USD as the pricing benchmark—making it a true USDT derivative.
Despite being overshadowed by mainstream perpetual contracts, its utility is severely underestimated.
Key Advantages
Hedging During Extreme Volatility
During the March 12–13 market crash, users rushed to convert Bitcoin into USDT, spiking its price to ¥7.4544 (a 40% premium). Those who sold BTC at a loss faced dual damages:- Bitcoin's price drop.
- Fewer USDT acquired due to inflated prices.
With USDT perpetual contracts, users can:
- Long USDT during BTC crashes to amplify gains.
- Short USDT during BTC rallies to hedge against USDT depreciation.
Alignment with Market Trends
USDT trading volume dominates OTC and fiat markets. With the Federal Reserve’s unlimited quantitative easing (QE), USDT mirrors this inflationary model—23 issuances since 2020 added 19.4B USDT (~¥135.8B).- Low Liquidation Risk
Priced against USD, USDT contracts exhibit minimal volatility. BTSE offers 1–20x leverage, balancing risk and flexibility for hedging. - No Expiry, Lower Fees
As perpetual products, they eliminate repetitive rollover costs and streamline positions.
BTSE’s Contract Design
- Linear Settlement: USD-denominated for transparent P&L tracking.
- Simplified Risk Management: Avoids nonlinear complexities of coin-margined contracts.
FAQ
Q: How does USDT’s premium affect perpetual contracts?
A: Premiums create arbitrage opportunities. Long positions profit when USDT prices rise abnormally.
Q: Is USDT suitable for high-frequency trading?
A: Yes, but leverage should be capped at 10x to mitigate slippage risks.
Q: Why choose USD settlement over USDT?
A: USD’s stability reduces margin volatility versus USDT’s occasional溢价.
Q: Can USDT contracts replace stablecoin holdings?
A: Partially. They hedge price risks but don’t eliminate counterparty exposure.
Getting Started
Trade USDT perpetual contracts on BTSE’s platform or practice risk-free via their testnet.
Disclaimer: This content is for educational purposes only and does not constitute financial advice.
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