Contents
What is an Inverse Futures Grid?
A Inverse Futures Grid is a specialized type of Futures Grid, focused on investing and earning in non-stablecoins.
Investments are made in cryptocurrencies other than stablecoins (such as BTC, ETH, and SOL, excluding USDT), with profits realized in the same currency.
It operates on the same principles as other Futures Grids.
Inverse Futures Grid vs. Other Futures Grids
Inverse Futures Grid | USDT Futures Grid | Coin-M Futures Grid | |
Supported Positions | Long, Short, Neutral | Long, Short, Neutral | Long, Short, Neutral |
Supported Symbol | Inverse Futures eg: BTC/USDT Inverse Futures | USDT Futures eg: BTC/USDT Perpetual Futures | Non-stablecoin Futures eg:ETH/BTC Perpetual Futures |
Investment Currency | Non-stablecoins | USDT | USDT or non-stablecoins, optional |
Realized Profits in | Non-stablecoins | USDT | USDT or non-stablecoins, optional |
Profit Characteristics | Earn dual returns from coin price fluctuations | Earn returns from coin price fluctuations | Earn returns from crypto exchange rate fluctuations |
Capital Utilization Rate | ★★★★★ | ★★★★ | ★★★★★ |
How to use an Inverse Futures Grid?
As mentioned earlier, Inverse Futures Grid is about “investing and earning in non-stablecoins”, so coin prices have a dual impact:
The change in holdings, reflected in the number of coins, is due to PnL from the grid. And the USDT value of the coins.
Therefore, common ways to use an Inverse Futures Grid are:
(1) Go long during coin price rises to capture dual gains
When coin prices rise, an Inverse Futures Long Grid will:
- Earn additional coins.
- Benefit from the increased USDT value of the invested coins.
- Continue to profit if coin prices rise further.
Assume a BTC/USDT Inverse Futures Long Grid and a USDT Futures Long Grid are initiated at 80,000 USDT with identical parameters, investing 0.1 BTC and 8,000 USDT, both using 3x leverage.
When the price rises to 100,000 USDT, the Inverse Futures Grid’s net value will be higher:
- The USDT Futures Grid earns 6,000 USDT, resulting in a total net value of 14,000 USDT with the initial 8,000 USDT.
- The Inverse Futures Grid gains 0.06 BTC (worth 6,000 USDT), plus the initial 0.1 BTC (worth 10,000 USDT), totaling a net value of 16,000 USDT.
- Additionally, if the grids are closed and BTC prices continue to rise, the 1.06 BTC from the Inverse Futures Grid will further increase in value, whereas the net value of the USDT Futures Grid will remain unchanged.
(2) Short when coin prices fall to hedge and avoid selling off spot
When coin prices fall, an Inverse Futures Short Grid will:
- Earn additional coins and receive funding fee income to ensure the net value does not decrease or even grow (depending on leverage)
- Avoid “selling too soon” (selling spot for hedging and missing out on subsequent rise)
Assume a BTC/USDT Inverse Futures Short Grid is initiated at 100,000 USDT, with an investment of 0.1 BTC (equivalent to 10,000 USDT), then the price falls to 80,000 USDT.
At 3x leverage:
- The grid earns 0.075 BTC (worth 6,000 USDT), combined with the initial 0.1 BTC (8,000 USDT), totaling a net value of 14,000 USDT.
At 1x leverage:
- The grid earns 0.025 BTC (worth 2,000 USDT), combined with the initial 0.1 BTC (8,000 USDT), totaling a net value of 10,000 USDT.
Notably, with 1x leverage shorting, the Inverse Futures Grid is unlikely to experience liquidation, making it a preferred option for hedging.
(3) When uncertain about coin price direction, use fluctuations to gather more coins
As a grid strategy, the Inverse Futures Grid can effectively arbitrage through price fluctuations to accumulate coins.
This approach equips investors for future market developments.
Q&A
Q: Are the Inverse Futures and USDT Futures for the same cryptocurrency identical? For example, the BTC/USDT Inverse Futures and the BTC/USDT Futures?
The prices of Inverse Futures and USDT Futures for the same cryptocurrency both track the spot market, so their movements are generally similar. However, as they are distinct futures, their price fluctuations will not be perfectly aligned, and their liquidity may differ.
Q: With identical parameters and entry price, will the profit net value (not total net value) of an Inverse Futures Grid exceed that of a USDT Futures Grid?
If parameters and entry prices are the same, the profit net value of both grids will generally be similar. Key differences include the net value of the investment amount, and the capability to hold spot (thus avoiding missed profit from future price rises). Moreover, since Inverse Futures and USDT Futures differ, during extreme market scenarios, the number of arbitrages may vary, causing slight differences in profit.