Multi-asset collateral function allows you to use both fiat and crypto currencies you hold as your margin collateral, and lets you use your assets with more flexibility. The function can decrease the risk of selling cryptocurrencies when the market is volatile, saves you the trouble and fees from constantly converting the assets into margin, and increases the ROA return of your crypto assets.
Let’s say you bought BTC at 7000 USD and the market price is fluctuating between 6900 and 7100, you can choose to hold the BTC and wait for a better shot. At the same time, you can use this BTC as your margin collateral and trade in the futures market to hedge your BTC exposure, or to speculate on the market.
- Assume you go long (buy) at the spot market and go short (sell) at the futures market. If BTC price rises, you make unrealized PnL (profit-and-loss) on your spot long position. On the other hand, you lose unrealized PnL on your short futures position. If the BTC price drops, you lose unrealized PnL on your spot position, but gains on the futures hedge. If the two positions are matched in terms of notional value, then you have a perfect hedge. Any gains on one position are offset by the losses on the other position.
- On the other hand, let’s say you go long (buy) at both the spot and futures markets. This implies you are speculating on the market to go up with a leveraged position. When the futures market price rises, you can realize the profit on your futures position by closing it. The combination of long position on both spot and futures market means you profit more than just holding the coin when markets go up. On the contrary, if the futures market price falls, you face a higher risk of liquidation.
* Futures products are high-risk products. The purpose of this simplified example is to provide a better understanding of the function but should NOT, in any way, be viewed as an investment suggestion. Real market trends are more complicated. Please evaluate the risks carefully before trading.
BTSE obtains the average spot liquidity mid-price of the cryptocurrencies (e.g. BTC) from several major exchanges, and then calculates the USD value of the cryptocurrency based on its the market liquidity, level of risk, and the amount you use as margin. That USD value is your margin balance.
- The average spot liquidity mid-price will be updated several times per second, therefore the USD value of your cryptocurrency will be a dynamic value that changes along with the market.
(Please keep an eye on the price or set a stop loss point to avoid unexpected loss)
- For the average spot liquidity mid-price calculation, please refer to this FAQ
- Depending on the market liquidity, level of risk, and the amount you use as margin, the USD conversion value of each cryptocurrency will decrease between 0. 1% - 49.5%. For more details, please refer to the table below.
* The haircut values are subjected to change depending on market volatility.
≥ 0 BTC, Haircut = 0.1%
≥ 0 ETH, Haircut = 0.75%
≥ 0 LTC, Haircut = 0.75%
≥ 30 BTC, Haircut = 0.15%
≥ 200 ETH, Haircut = 1.5%
≥ 400 LTC, Haircut = 1.5%
≥ 90 BTC, Haircut = 0.25%
≥ 600 ETH, Haircut = 2%
≥ 800 LTC, Haircut = 2.5%
≥ 150 BTC, Haircut = 0.5%
≥ 1,000 ETH, Haircut = 3%
≥ 2,000 LTC, Haircut = 3%
≥ 300 BTC, Haircut = 1%
≥ 2,000 ETH, Haircut = 3.5%
≥ 4,000 LTC, Haircut = 4%
≥ 500 BTC, Haircut = 2%
≥ 5,000 ETH, Haircut = 5%
≥ 10,000 LTC, Haircut = 5%
≥ 0 USDT, Haircut = 0.15%
≥ 0 TUSD, Haircut = 0%
≥ 0 USDC, Haircut = 0%
≥ 500,000 USDT, Haircut = 0.25%
≥ 500,000 TUSD, Haircut = 0%
≥ 500,000 USDC, Haircut = 0%
≥ 1,000,000 USDT, Haircut = 0.5%
≥ 1,000,000 TUSD, Haircut = 0%
≥ 1,000,000 USDC, Haircut = 0%
≥ 2,000,000 USDT, Haircut = 1%
≥ 2,000,000 TUSD, Haircut = 0%
≥ 2,000,000 USDC, Haircut = 0%
≥ 5,000,000 USDT, Haircut = 2%
≥ 5,000,000 TUSD, Haircut = 0%
≥ 5,000,000 USDC, Haircut = 0%
≥ 0 XMR, Haircut = 2%
≥ 0 DC, Haircut = 0.2%
≥ 0 BTSE, Haircut = 2.5%
≥ 1,000 XMR, Haircut = 5%
≥ 500,000 DC, Haircut = 0.25%
≥ 5,000 BTSE, Haircut = 3%
≥ 5,000 XMR, Haircut = 10%
≥ 1,000,000 DC, Haircut = 0.5%
≥ 10,000 BTSE, Haircut = 3%
≥ 10,000 XMR, Haircut = 15%
≥ 2,000,000 DC, Haircut = 1%
≥ 20,000 BTSE, Haircut = 4%
≥ 50,000 XMR, Haircut = 20%
≥ 5,000,000 DC, Haircut = 2%
≥ 30,000 BTSE, Haircut = 5%
When you have USD, non-USD fiat and cryptocurrencies in your futures wallet:
- The Realized Loss (the final loss) amount of the position will be deducted according to the following sequence:
USD > Non-USD fiat > Stablecoins > Cryptocurrencies (highest priced asset will be deducted first)
- USD fiat is considered 1:1
- The Realized PnL (profit and loss) will be calculated based on the settlement currency you selected.
- When you settle in USD: your PnL is the USD value
- When you settle in cryptocurrencies:
Cryptocurrency Profit/Loss Amount = USD Value of Realized PnL / [Average Spot Liquidity Mid Price x (1 + Haircut%)]
For example: when you close the position, the realized PnL is 1,000 USD, and you choose to settle in BTC, and the liquidity mid price of BTC is 8,000 USD, then your BTC PnL is 1000 / [8000 x (1 + 0.25%)] = 0.1246883 BTC
If you use a non-USD fiat currency as your margin, BTSE will divide the fiat balance by current "BTSE Buy" exchange rate to calculate your USD margin value. BTSE's exchange rate will be updated multiple times per day. For the latest exchange rate, please refer to the Exchange Rate Page.
For example: if you use 1000 AED as margin, then your USD margin value = 1000 / 3.6840 = 271.44 USD
Click the Transfer button (upper right corner of the wallet page) to transfer the assets from your spot wallet to futures wallet. For more details, please refer to this FAQ page.