Best Cryptocurrency Trading Platforms With Leverage Trading 2020

Best Cryptocurrency Trading Platforms With Leverage Trading 2020

Best Crypto Margin Trading Exchanges

Margin trading is a type of investing which gives individuals a chance to increase their investment by adding leverage to it.

This practice lets you borrow someone else’s cryptocurrency and invest it as you see fit. Margin trades are usually made by investors who are certain that the market will move in one or the other direction in the near future. You’re basically accepting the added risk of betting loaned money because you feel that the odds are that your bet will pay out.

So, for example, you have $100 worth of Bitcoin and you are certain the market price will go up through the upcoming days. Let’s say that you are so certain that this rise in price will happen that you want to invest more than you are currently holding. You can borrow additional $100 percent from the market to invest a total of $200 in your “long” position (also known as the buy position, a market position investors take when they expect the price to go up). With this, you have now made a leverage trade of 2:1. Your loan of $100 worth of BTC will eventually have to be repaid; once the loan amortization period expires, the person who loaned you the money will have received its $100 along with a pre-arranged interest.

In order to make sure that the loaning party receives his money back, the platform can margin call your trade if its total value falls beneath a certain threshold (one that would lead to you losing borrowed money). In this case, if your investment’s value were to fall beneath $100, you’d end up margin called and your trade would be liquidated. To avoid going into too much detail (check out this link for a more in-depth look into the practice), margin trading has been a mainstay of traditional investing for quite some time and has successfully made the transition into crypto markets as well.

Leveraging someone else’s capital against a highly likely market outcome can be an extremely efficient way of multiplying your own holdings, especially when you go for higher margins like 4x, 5x, 8x or even 100x (the highest margin currently allowed on existing trading platforms). Modern crypto landscape is definitely a good place to learn about and master margin trading. Constant crypto volatility requires savvy market observers to predict future price movements and margin trading exchanges are a perfect playground for them to cash in on their skills. As a significant portion of these savants will want to test out their skills on the mentioned playground, we’ll give them a solid and list out some of the top margin trading exchanges in the market.

Top Cryptocurrency & Bitcoin Margin Trading Exchanges

BitMEX

BitMEX is one of the best margin trading platforms for bitcoin allowing its traders to leverage their positions. Co-founded and ran by the charismatic Arthur Hayes who achieved somewhat of a meme-like status in the community due to his unrelenting smile which beamed at us even as Bitcoin tumbled down from its 2017 all-time-highs, the exchange has offered margin trading services since 2014. This platform is not a beginner-friendly exchange – some knowledge of traditional futures and options will be required before you can start safely using the trading environment.

BitMEX offers a whole host of different contracts, including traditional futures (for Bitcoin, Bitcoin Cash, Cardano, EOS, Ethereum, Litecoin, Ripple, and Tron), perpetual contracts (Bitcoin and Ethereum), and BitMEX upside/downside contracts for Bitcoin. It accepts only Bitcoin deposits and offers a maximum leverage of 100x. While never hacked so far, the exchange has somewhat of a negative history of going down “for maintenance” just before/after strong Bitcoin movements. The exchange also seems to have a real problem with bugs and trading interface freezes that can cost you money. Is that Arthur nicking your money with a characteristic maniacal smile on his face or just a coincidence? We’ll probably never find out. Overall BitMEX remains by far the market’s leading margin trading platform in terms of volume that will satisfy the needs of most advanced users looking to trade crypto with leverage. That is if they manage to avoid the infamous “order submission error”.

Article Produced By
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.

https://captainaltcoin.com/margin-trading-crypto-exchanges/

Heiko Closhen, Entrepreneur

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