How to Trade BTC On-Chain: A Step-by-Step Guide for AFX
Learn how to trade Bitcoin on-chain in 8 steps: deposit USDC on Arbitrum, open a BTC-PERP position on AFX, and withdraw anytime. No CEX, no BTC custody.
Featured Snippet: To trade BTC on-chain on AFX, deposit USDC on the Arbitrum network to your AFX account, navigate to the BTC-PERP market, set your leverage and order size, then place a market or limit order. All settlement happens on-chain — your position, margin, and PnL are recorded on the AFX network and withdrawable to your wallet at any time.
What Does "Trading BTC On-Chain" Mean?
Trading BTC "on-chain" means your trades settle on a blockchain rather than on a centralized exchange's internal ledger. On AFX, you are trading BTC-PERP — a perpetual futures contract that tracks Bitcoin's price — with settlement on the AFX network and USDC deposits and withdrawals processed over Arbitrum.
This is different from buying Bitcoin on a spot exchange:
You do not hold or custody actual BTC
Your margin and profits are denominated in USDC
Deposits and withdrawals use the Arbitrum blockchain — publicly verifiable
You can go long or short with leverage up to 100x
On-chain trading means the exchange cannot freeze your funds unilaterally. Deposits and withdrawals are blockchain transactions, not internal ledger entries.
Before You Start: What You Need
A USDC balance on Arbitrum. AFX only accepts USDC over the Arbitrum network. If your USDC is on Ethereum mainnet or another chain, you will need to bridge it to Arbitrum first using a bridge service.
An AFX account. You can register with an email address or connect a crypto wallet directly.
A compatible wallet (optional). If you use wallet-based login, you need a wallet that supports Arbitrum (e.g., MetaMask with Arbitrum added as a network).
Important: Do not send USDT, ETH, ARB, or any token other than USDC. Do not send USDC on Ethereum mainnet, Solana, or any chain other than Arbitrum. Incorrect deposits are not automatically credited.
Step-by-Step: How to Trade BTC On-Chain on AFX
Step 1 — Create an AFX Account
Go to app.afx.xyz and sign up.
Email account: Enter your email, set a password, and verify your email address. AFX creates a custodial account linked to your email.
Wallet account: Click "Connect Wallet," select your wallet, and sign the connection request. Your wallet address becomes your account identifier.
Both account types give you access to the same trading interface and markets.
Step 2 — Deposit USDC on Arbitrum
Navigate to your Portfolio or Deposit page inside AFX.
Copy your AFX deposit address. This is your Arbitrum address where you will send USDC.
From your wallet or exchange, initiate a withdrawal of USDC to this address. Select Arbitrum as the network — not Ethereum, not Polygon, not any other chain.
Confirm the transaction. Arbitrum transactions typically confirm within seconds to a couple of minutes.
Once confirmed, your USDC balance will appear in your AFX account.
If you are withdrawing from a centralized exchange (Binance, Coinbase, Bybit, etc.), look for "Arbitrum" or "ARB" in the network selector when withdrawing USDC.
Step 3 — Navigate to the BTC-PERP Market
Click on Trade in the main navigation.
The default market is BTC-PERP (BTCUSDC). If you are on a different market, use the market selector at the top of the screen to switch to BTC-PERP.
The trading interface shows:
A price chart (candlestick, default)
The order book (bids and asks in real time)
Your open positions and order history at the bottom
The order entry panel on the right
Step 4 — Set Your Leverage
In the order entry panel, find the leverage slider or input field.
BTC-PERP on AFX supports up to 100x leverage. For most traders, especially beginners, starting at 2x–5x is more appropriate — higher leverage means your liquidation price is much closer to your entry.
Set your desired leverage before placing your order. You can adjust it between trades.
How leverage affects your liquidation price: At 10x leverage, a 10% adverse move exhausts your margin. At 100x, a 1% move can liquidate your position. Always check your estimated liquidation price before confirming.
Step 5 — Place Your Order
Choose your order type:
Market order: Executes immediately at the best available price in the order book. Use when you want instant execution and are comfortable with slight slippage.
Limit order: Set the exact price at which you want to buy or sell. The order sits in the book until filled or cancelled. Use when you want price control.
Stop order: Triggers a market order when price reaches a specified level. Use to set stop-losses or breakout entries.
To go long (buy / profit from price rising):
Select Buy / Long in the order panel.
Enter your order size (in USDC or BTC units, depending on interface).
Review the estimated margin required, liquidation price, and fees.
Click Place Order (market) or Place Limit Order.
To go short (sell / profit from price falling):
Select Sell / Short.
Same process as above. A short position gains value when BTC price falls.
Step 6 — Monitor Your Position
After your order fills, your open position appears in the Positions tab at the bottom of the screen. You can see:
Entry price — the price at which your position was opened
Mark price — the current fair-value price used for PnL and liquidation calculations
Unrealized PnL — your current profit or loss at mark price
Liquidation price — the mark price level at which your position will be force-closed
Funding — the next funding payment direction and rate
Keep the liquidation price visible. If BTC price moves toward it, you can add margin or reduce your position size to avoid liquidation.
Step 7 — Close Your Position
When you are ready to exit:
In the Positions tab, find your open BTC-PERP position.
Click Close (or Market Close for instant execution).
Alternatively, place a limit order in the opposite direction to close at a target price.
Once closed, your realized PnL is credited to your USDC balance.
To set a take-profit or stop-loss in advance, use a Stop order or the platform's TP/SL fields if available in the order panel.
Step 8 — Withdraw Your USDC
When you want to move funds back to your wallet:
Go to Portfolio → Withdraw.
Enter the amount and your Arbitrum wallet address.
Confirm the withdrawal. AFX processes withdrawals in real time — there is no waiting period or withdrawal queue.
The USDC arrives in your Arbitrum wallet, fully on-chain and self-custodied.
FAQ
How to use Bitcoin on-chain?
"Using Bitcoin on-chain" can mean different things. If you want to trade Bitcoin price exposure on-chain, you use a perpetual DEX like AFX — deposit USDC, trade BTC-PERP with leverage, and withdraw USDC back to your wallet. You never hold actual BTC; instead, you hold USDC and take derivative exposure to Bitcoin's price. If you want to transact with actual BTC, you need a Bitcoin wallet and BTC network funds — a different use case from what AFX provides.
How to trade BTC on blockchain?
Trading BTC on blockchain means using a DEX that settles trades on-chain rather than on a centralized exchange's private ledger. On AFX, you deposit USDC to an Arbitrum address, trade BTC-PERP through an on-chain orderbook, and withdraw USDC back to your wallet — all transactions are verifiable on the Arbitrum blockchain. The steps are: create account → deposit USDC on Arbitrum → open BTC-PERP position → close position → withdraw USDC.
What does BTC on-chain mean?
"On-chain" refers to activity recorded on a blockchain's public ledger. For BTC trading, "on-chain" trading means your margin deposits, withdrawals, and settlement are blockchain transactions — not internal entries on a centralized exchange database. On AFX, the settlement layer is the AFX network, with USDC on Arbitrum used for capital movement. This is distinct from traditional spot Bitcoin transactions on the Bitcoin network itself.
Keep Learning
What Is a Perpetual DEX? — the foundation for understanding how on-chain perp trading works
What Is a Funding Rate? — the periodic cost (or credit) of holding a leveraged position overnight
What Is Liquidation? — how forced position closure works and how to avoid it
Ready to trade BTC on-chain? Open a position at app.afx.xyz.
This article is for informational and educational purposes only. It does not constitute financial or investment advice. Trading perpetual futures involves significant risk of loss, including the possibility of losing your entire deposited margin. Not Financial Advice (NFA). Always do your own research and trade only with funds you can afford to lose.
Last updated