BTC Perpetual Contracts Introduction in ETH Trading Area

BTC

Bitcoin (BTC) is currently the most widely used digital currency. It was created on 3 January 2009 for peer-to-peer transmission, with a total supply of 21million. The BTC network releases a certain amount of coins every 10 minutes and is expected to reach total supply in the year 2140. BTC is called “Digital Gold” by investors, and are generated by complex calculations according to a specific algorithm. It does not rely on a specific issuing institution; Instead it uses a distributed database composed of many nodes in the entire P2P network for confirmation and recoding of all transaction behaviors. Security is enforced by cryptography and the economics design ensures that it cannot be manipulated by holding a large number of BTC.

BTC contracts: BTC as underlying asset, USD as reference currency and ETH as settlement currency, where 1 Lot = Latest BTC price /1000 number of ETH (1000 is used purely as a ETH trading unit and have no relation to actual exchange rates). 10x, 20x or 50x leverage trading available.

BTC Perpetual Contracts example: 

If the current price of BTC is quoted at 4000USD, and trader would like to short the market (i.e expecting prices to fall) with 10 Lots:

Amount = Market price /Trading unit * number of Lots = 4000 /1000 * 10 = 40ETH

If trader chose to trade with 10x leverage:

Margin used = Transaction amount / Leverage = 40/10 = 4ETH, using only 4ETH to trade 10 Lots of BTC contracts.

If prices fall to 3500USD and trader closes positions, profit is calculated per below:

Profit = (Opening price – Selling price)/Trading unit * positions sold = (4000-3500) /1000 * 10 = 5ETH