What is Cryptocurrency Spot Trading?
Cryptocurrency spot trading refers to buying and selling cryptocurrencies at the current market price. For example, in the BTC/USDT trading pair, the price represents the amount of USDT needed to buy or sell 1 BTC.
Features of Spot Trading:
Requires Holding Cryptocurrency: Spot trading follows a cash-and-carry model, where ownership is transferred through physical settlement.
No Need to Trade Physical Assets: Traders do not need to hold any actual assets; transactions occur through cryptocurrency.
Can Be Held Long-Term with No Settlement Requirements: Traders can hold cryptocurrencies for long-term appreciation or use them to trade other tokens with potential value. There are no forced liquidation or position reduction rules.
Order Matching, Transparent Pricing: Market prices are determined by supply and demand, and the prices are publicly and transparently available in the market.