As interest in cryptocurrency increases, more and more people are starting to invest.
Especially after being re-elected, President Trump, who was previously quite silent, has started talking about Bitcoin and cryptocurrency again.
Jokes about the possibility of crypto only being used for campaigns and then abandoned have begun to subside, so investors' attention is now focused on what strategies will happen throughout 2025.
However, the current market atmosphere cannot be seen as positively as it was at the end of last year or the beginning of this year. Due to high volatility, each investor needs their own strategy to survive and continue investing.
This has led to an increase in investment through global exchanges. Therefore, today I want to introduce Binance, the number 1 exchange in the world, while discussing one important concept that you must know: Funding Fee on Binance.
Binance is widely known as the number one exchange in the world, both in spot and futures trading, with the largest transaction volume and the largest number of investors.
To understand the concept of funding fees on global exchanges, it is very appropriate to use Binance as an example because it is the most representative platform.
Funding fee is a term in futures trading.
As is known, futures allow two directions of transactions: long position (betting the price will rise) and short position (betting the price will fall).
If the market thinks the price will fall, investors take a short position, while if the price is expected to rise, investors take a long position. Because the flow of investors is different, the ratio of long and short will not be balanced.
If the sentiment is positive, the number of long positions increases. Conversely, if the market falls, the number of short positions increases.
To prevent this imbalance, the Funding Fee mechanism was created.
According to the official explanation, the funding fee on Binance is a periodic payment between long and short traders based on the price difference between the perpetual contract and the spot price.
For example, if the funding fee is positive (+), it means there are more long positions than short. In this condition, the longs must pay the funding fee to the shorts.
Conversely, if the funding fee is negative (-), it means there are more shorts, so the shorts pay the funding fee to the longs.
The funding fee on Binance is given 3 times a day at Western Indonesian Time (WIB), at 07.00, 15.00, and 23.00 WIB.
At that hour, according to the position you hold (long or short), you can receive or pay a funding fee. Of course, leverage also applies, so the result can be greater depending on market conditions.
For example, with a capital of Rp1,600,000 using 30x leverage, the value becomes Rp48,000,000. If the funding fee is set at 0.01%, then you pay around Rp4,800.
That's why when the funding fee payment time arrives, market volatility often increases sharply.
This means that the funding fee and its percentage are directly influenced by the balance of market supply and demand. By understanding this, you can better read the direction and atmosphere of the market.
Of course, this concept is more profitable for investors who are already experienced and have a lot of experience. However, understanding the funding fee is still very important, even for beginners, because it can be combined with other investment strategies.
By registering through the link below, you can get a 20% transaction fee discount.
📍 Go to get a 20% discount on Binance fees
Even users who are already registered can still get a 20% discount on fees if they meet the following 5 conditions:.
The invited person already has a registered account on Binance.
The invited person has never received an invitation before.
The invited person's account has not transacted or used any products on the Binance platform for the past 180 days.
When a qualified guest opens the link and logs in, a confirmation window will appear.
When the inviter clicks [Bind Now], the bond becomes effective.
Keep in mind: if you enter the wrong referral code or skip it, you cannot fix it. So make sure to use the link below to get the benefit.
The funding fee on Binance is an important concept that can be utilized, especially in market conditions with high volatility like today.
Hopefully this explanation is helpful, always be successful in your trading, and see you in the next post. Thank you.