Bitcoin trading has evolved significantly over the past decade, with derivative products like futures and perpetual contracts becoming central to how investors gain exposure to price movements. For traders navigating this space, understanding the nuances—such as time limits, settlement mechanics, and contract types—is essential for effective risk management and strategy development.
This guide breaks down everything you need to know about Bitcoin perpetual contracts, including whether they have expiration dates, how they differ from traditional futures, and what makes them a preferred choice for 24/7 crypto trading.
Understanding Bitcoin Contract Types: Expiry vs. Perpetual
Not all Bitcoin contracts are created equal. There are two primary categories:
- Expiring (or Delivery) Futures Contracts
- Perpetual Contracts
Expiring Futures Contracts
These are time-bound agreements that settle on a predetermined date. Common expiry cycles include:
- Weekly (e.g., every Friday)
- Bi-weekly (next week)
- Quarterly (March, June, September, December)
Once the contract reaches its maturity, it is automatically settled—usually in Bitcoin or USDT—based on the average price over a set period. During the final minutes before settlement (typically the last 10 minutes), most platforms restrict new positions to prevent manipulation.
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Perpetual Contracts: No Expiry, Unlimited Holding Period
Unlike traditional futures, Bitcoin perpetual contracts do not have an expiration date. This means traders can hold their positions indefinitely—as long as they maintain sufficient margin and avoid liquidation.
This feature makes perpetuals especially attractive for long-term directional bets without worrying about rollover costs or forced closures.
But how do exchanges keep the contract price aligned with the real market? Through a mechanism called funding rates.
How Funding Rates Work in Perpetual Contracts
Since there’s no expiry to pull the contract price toward the spot market, perpetual contracts use funding payments to maintain alignment.
Here’s how it works:
- If more traders are long (buying), funding rates become positive. Longs pay shorts.
- If more traders are short (selling), funding rates become negative. Shorts pay longs.
These payments occur at regular intervals (e.g., every 8 hours) and are calculated based on a percentage of the position value.
This system ensures that neither bullish nor bearish bias distorts the contract price over time.
Bitcoin Trading Hours: Is the Market Always Open?
Yes. One of the defining features of cryptocurrency markets is their 24/7 availability.
Unlike traditional stock exchanges, which operate during fixed business hours, Bitcoin markets never close. You can trade at any time—weekends, holidays, or middle of the night.
However, there is one exception:
Every Friday at 16:00 UTC+8, some platforms pause trading briefly for weekly contract settlements. During the last 10 minutes before settlement, only closing orders (liquidations or manual exits) are allowed—no new positions can be opened.
This temporary restriction applies only to expiring futures, not perpetual contracts.
Key Differences Between Bitcoin Contracts and Margin Trading
While both leverage your capital, contract trading and margin trading differ fundamentally in structure and usability.
| Feature | Margin Trading | Contract Trading |
|---|---|---|
| Borrowing Required | Yes — you borrow assets | No — synthetic exposure |
| Settlement | In underlying asset (e.g., BTC) | Can be in BTC or USDT |
| Complexity | Higher — repayment & interest | Lower — no borrowing steps |
| Contract Duration | N/A (position duration flexible) | Fixed or perpetual |
In margin trading, you must borrow actual coins, pay interest, and return them later. With contracts, you're simply speculating on price changes using derivatives—no borrowing needed.
For example:
- You open a 5x long position on BTC/USDT with $200 margin.
- Your effective exposure: $1,000 worth of Bitcoin.
- If BTC rises 10%, you gain $100 (50% return on margin).
- If BTC drops 15%, you risk partial or full liquidation.
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Can You Hold Crypto Contracts Forever?
Only if they’re perpetual contracts.
Standard futures contracts must be closed or settled upon expiry. Holding beyond that point isn't possible—the system auto-closes them.
But perpetual contracts? They’re designed for long-term holding, provided:
- You maintain adequate margin
- You accept ongoing funding rate costs (or benefits)
- You monitor liquidation risks
This flexibility allows traders to build strategies around macroeconomic trends without being constrained by calendar dates.
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Frequently Asked Questions (FAQ)
Q: Do Bitcoin perpetual contracts ever expire?
No. Unlike standard futures, Bitcoin perpetual contracts have no expiration date, allowing traders to hold positions indefinitely as long as margin requirements are met.
Q: What happens during contract settlement on Fridays?
At 16:00 UTC+8 every Friday, some exchanges settle weekly futures contracts. Trading pauses briefly, and during the final 10 minutes, only close orders are permitted—no new entries allowed.
Q: Is it legal to trade Bitcoin contracts?
Yes, in most jurisdictions. Personal trading is generally permitted. However, operating a crypto exchange or facilitating mass investment may require licensing and compliance with financial regulations.
Q: How is profit calculated in USDT-margined contracts?
Profits are calculated in stablecoin (e.g., USDT). For example, a 10% gain on a $1,000 BTC/USDT position yields $100 in USDT—regardless of BTC’s current price.
Q: What triggers liquidation in leveraged contracts?
Liquidation occurs when losses deplete your margin below the maintenance threshold. The platform automatically closes your position to prevent further losses.
Q: Can I trade Bitcoin 24/7?
Yes. The Bitcoin market operates 24 hours a day, 7 days a week, except during scheduled settlement windows for certain futures products.
Final Thoughts: Why Perpetual Contracts Dominate Crypto Trading
Perpetual contracts have become the backbone of modern cryptocurrency derivatives trading due to their flexibility, ease of use, and alignment with the always-on nature of digital asset markets.
Whether you're hedging portfolio risk or speculating on short-term volatility, understanding the mechanics—like funding rates, settlement schedules, and margin rules—is crucial.
With no need to roll over expiring positions and minimal operational friction, perpetuals offer a streamlined way to engage with Bitcoin’s price action across any timeframe.
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By mastering these instruments, traders unlock greater control over their strategies while staying fully aligned with the decentralized, borderless ethos of crypto itself.