Binance is the largest cryptocurrency exchange in the world but not only. It is also an entire ecosystem consisting of a number of different products. One of them is the Binance Futures platform. For some time now it has been offering an interesting mode called Multi-Assets and it is this mode that we will focus on in today’s article. As you read on, you will learn what Multi-Assets on Binance Futures is, why you should use it and how to access it. So, here we go!
What is Multi-Assets mode on Binance Futures?
Multi-Assets mode is a new feature on the Binance Futures platform that allows users to trade futures contracts using USDT or BUSD as collateral. Before the exchange created this tool, it was only possible to trade using a single asset. This forced traders to allocate a significant portion of their portfolios to a specific stablecoin. With Multi-Assets mode, traders can now split the collateral between USDT-M and BUSD-M contracts.
Moreover, Multi-Asset allows using the profits from a BUSD or USDT contract for another contract. This makes hedging positions in different ways possible. In conclusion, Multi-Assets is a versatile trading feature on Binance. It offers traders many different benefits that were not available before in Single-Asset mode.
Why use Multi-Assets mode on Binance Futures?
Using the Multi-Assets mode on the Binance Futures platform comes with many benefits. Here are some of them.
If you own BUSD, you can save on both spot and margin trading fees. However, that’s not all. By using the Multi-Asset mode you will also save on commissions for trading BUSD-M contracts.
This mode allows you to trade USDT-M contracts without having to convert to USDT. Therefore it gives you the flexibility to open positions for both USDT-M and BUSD-M when a good opportunity arises.
You can also save on fees by holding USDT in your portfolio and trading BUSD-M contracts. These contracts have lower commissions, that’s why you can reduce your trading costs and at the same time increase your profits.
Multi-Assets mode also allows you to trade in both directions while using the same base cryptocurrency. For example, if you believe that BTC will decline in the near future, you can trade the BTC/USDT contract. This way you counteract the potential loss. Let’s analyze this with a specific example:
Let’s assume that you have a long-term position of 50,000 BUSD on the perpetual BTC/BUSD contract. After conducting a technical analysis, you determine that there will be a downtrend in the near term. Using the Multi Assets mode, hedging in this scenario is very simple. A way to bet against BTC and short it would be a quarterly contract in USDT.
Your position could simply involve taking half the size of your BUSD position in USDT. In other words, a quarterly BTC/USDT futures contract worth $25,000 USDT.So let’s say that the price of BTC falls by 20%. In that case the loss would be 10,000 USDT. However, thanks to the Multi-Assets mode it will be reduced by 5,000 USDT because you hold hedges worth half of your long-term position. Finally, although you make a loss, it is much smaller.
So in conclusion, the advantages of Multi-Assets mode on Binance Futures are:
- Increased capital efficiency
How to access Multi-Assets Mode?
Using Multi-Assets mode is very easy. All you need to do is follow a few simple steps:
- To access Multi-Assets mode from your computer, first, log into your Binance account. If you do not have one yet, you can sign up by clicking on this link.
- If you are already logged in, hover your mouse over “Derivatives” at the top of the page and then click on USD-M Futures. Alternatively, you can click on this link. It will take you straight to the right place.
- Now find the settings icon on the right (as in the image below). Then select “Preferences”.
- Click “Assets Mode”, select “Multi-Asset Mode” and that’s it! From now on you will be trading in Multi-Assets mode.
For mobile devices, the process looks very similar:
- Log in to your Binance account in the App.
- Go to the USD-M Futures interface and find the “[…]” button.
- Click on it and then click “Preferences”.
- Now click “Asset Mode” and select “Multi-Asset Mode”.
If you would like to learn more about Multi-Assets mode, take a look at the official Binance website. You will find all the information at this link.