Spot Trading

Spot trading is buying or selling an asset for immediate delivery at the current market price — the "spot" price. When you spot-buy bitcoin, you own actual bitcoin that you can withdraw to your own wallet, in contrast to derivatives where you hold a contract tracking the price.

For example, spot-buying 0.1 BTC at $60,000 on an exchange costs $6,000 plus fees, and the BTC is credited to your exchange account, from which you can withdraw it to self-custody. If the price doubles, your holding doubles in value; if it halves, you still own 0.1 BTC and can wait indefinitely, since there is no expiry, funding payment, or liquidation.

Spot trading is the simplest and generally safest way to trade crypto: losses are limited to what you invested, and there is no leverage forcing you out of a position at the worst moment. The spot market also anchors everything else — derivatives, ETFs, and indexes all reference spot prices. A common misconception is that coins held on an exchange after a spot purchase are equivalent to coins in your own wallet; on the exchange they are an IOU from the platform until you withdraw them.