All of them are a filter for those who have fear and lack of information.
Silence laughs in a dilemma, and in the end, you end up losing to complete your rotten life.
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๐จ Bitcoin Spot vs Futures: Why are Futures Liquidated Only?
๐ฅ In the market $BTC Spot, the investor buys real Bitcoin and actually owns it in their wallet; there is no concept of liquidation in this type of trading because you do not borrow money or use leverage. Even if the price drops significantly, you remain the owner of the Bitcoin.
๐จ Futures, on the other hand, do not mean owning $BTC actually, but betting on its price movement up or down, often using leverage. Here lies the fundamental problem: the trader opens a position with borrowed money from the platform, and if the price moves against their expectation by a certain percentage, the loss may completely consume the deposited margin. At that point, the platform automatically closes the position to protect its funds, which is known as liquidation.
๐ฅ This is why we see that liquidation happens in futures only and not in spot. The market does not "punish" the trader; rather, it imposes strict rules for risk management when using leverage.
๐ฅ Here you also understand why spot is halal and futures are haram; spot is buying and owning $BTC while futures are betting on the price (gambling) and leverage is usurious lending.
๐ฅ In the market $BTC Spot, the investor buys real Bitcoin and actually owns it in their wallet; there is no concept of liquidation in this type of trading because you do not borrow money or use leverage. Even if the price drops significantly, you remain the owner of the Bitcoin.
๐จ Futures, on the other hand, do not mean owning $BTC actually, but betting on its price movement up or down, often using leverage. Here lies the fundamental problem: the trader opens a position with borrowed money from the platform, and if the price moves against their expectation by a certain percentage, the loss may completely consume the deposited margin. At that point, the platform automatically closes the position to protect its funds, which is known as liquidation.
๐ฅ This is why we see that liquidation happens in futures only and not in spot. The market does not "punish" the trader; rather, it imposes strict rules for risk management when using leverage.
๐ฅ Here you also understand why spot is halal and futures are haram; spot is buying and owning $BTC while futures are betting on the price (gambling) and leverage is usurious lending.
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