Spot trading is buying and holding actual cryptocurrency without leverage, derivatives, or borrowed funds. When you buy spot Bitcoin, you own the actual asset and can hold it indefinitely without liquidation risk, funding fees, or expiration dates. Spot trading eliminates the primary cause of crypto losses (leverage liquidations) and is the safest way to gain long-term exposure to cryptocurrency price appreciation.
Example:
You buy $20,000 worth of Bitcoin at $80,000 using spot trading (0.25 BTC). Bitcoin crashes 50% to $40,000, reducing your position value to $10,000. While painful, you still own 0.25 BTC and can hold through the crash without forced liquidation. Compare this to leverage trading: With 10x leverage, that same 50% crash would liquidate your position entirely, wiping out your $20,000 and leaving you with nothing. During the October 2025 crash, spot holders who bought at $110,000 survived the drop to $80,000, while leveraged traders were liquidated and eliminated from the market.