Crypto enthusiasts, here's the lowdown on inverse futures contracts! Unlike conventional futures, inverse futures contracts benefit the seller when prices drop. The contract value is denominated in a fiat currency or stablecoin like USDT, with an inverse relationship between profit and loss and the underlying crypto's price movement.

Think of it as a derivative priced in USD but settled using the underlying crypto. For instance, the BTC/USD pair's market price is determined in USD, but the profit and margin are calculated in Bitcoin.

In contrast, linear futures contracts are settled in a stablecoin, while inverse futures contracts are settled in the underlying crypto. Inverse futures contracts offer advantages like long-term stack-building, leverage in bull markets, and hedging without converting holdings into stablecoins.

However, they come with risks like market volatility, counterparty risks, and liquidity concerns. So, tread carefully, crypto traders!