Apr 24, · Best Bitcoin Margin Exchanges. As with most things, not all exchanges that offer Bitcoin margin trading were created equally. Some offer high leverage and good liquidity, while others may have low fees or a large range of trading . Bitcoin and Crypto Margin Trading Exchanges (UPDATED ). Jun 15, · One of the oldest players in the cryptocurrency market, Poloniex still provides classical as well as margin trading for its users. However, the volume is very low on the exchange, but still one .
Best btc margin tradingBest Crypto Margin Trading Exchanges () - CoinDiligent
Kraken allows customers to trade several different cryptocurrency pairs on margin, with 8 base currencies, and four quote currencies supported. With an unblemished security record, and availability in the great majority of countries, Kraken is an excellent choice for those looking to get involved with margin trading. Poloniex is one of the most recognizable names in the cryptocurrency industry, and is particularly well-known among margin traders, since it was one of the first exchanges to offer this feature.
Currently, Poloniex allows margin trading with up to 2. Poloniex offers well over 50 different cryptocurrencies for trade on its platform, though only the most popular of these, such as Bitcoin BTC , Litecoin LTC and Basic Attention Token BAT have good volume, with around half of its trade pairs having low volume.
In , Poloniex removed the margin lending and margin trading options for US customers, in a move likely stemming from regulatory uncertainty around the feature. That being said, this feature is still available for most countries, but not to those in Germany, Pakistan or China. KYC is mandatory for all accounts, with customers being required to provide their name and address, as well as proof of identity to use the exchange features.
However, the exchange offers excellent security features, making it a secure choice for those concerned about the safety of their funds. As an advanced trading feature, margin trading allows savvy traders to potentially earn much more on their trades by opening positions much larger than their own account balance by borrowing funds from elsewhere.
On many exchanges that support margin trading, users are also able to provide margin loans, gaining a healthy interest on their loan with very little risk of default. By leveraging your investments, you will be able to earn much more than usually possible, and with as much as x leverage possible, what would normally be small gains, can turn into extraordinary profits. Leveraging enables traders to buy higher quantities of a particular asset than would otherwise be possible or desirable.
For example, if an exchange allows you to buy BTC with 2x leverage, you would be able to purchase twice the amount of BTC than you can technically afford, by borrowing the rest from the exchange or lenders. This enables you to benefit on the price movements of the full position value, magnifying your return and allowing potentially large profits on smaller investments. Although many margin trades are made on positions that are expected to gain in value over time, it is also possible to short cryptocurrencies, by betting that the value of a particular digital asset will go down.
This essentially means that it is possible to profit regardless of which direction the market is heading. Because of this, if you find yourself able to predict when the market is about to crash, then you could be in a position to make excellents profits, by opening a short position on a crypto margin trading platform.
In addition to being potentially lucrative, crypto leverage trading also acts to reduce your counterparty risk, which is defined as the risk that the counterparty in a contract will fail to meet the obligations they agreed to. In Bitcoin margin trading, the initial margin provided essentially ensures that the borrowing party will not default on their position. Similarly, trading on a centralized service that automatically matches, executes and liquidates positions ensures that contracted parties cannot abscond on their obligations.
Crypto margin trading, in particular, is one of the riskiest types of trading, and can be a punishing experience if you lack knowledge of the most common pitfalls and mistakes of the practice. Just like the way margin trading can magnify your profits, your losses are also magnified by the same degree when the markets are not in your favor. This is particularly worrying for crypto traders in high leverage positions, since the crypto markets are known to be notoriously volatile, with wild price movements being relatively commonplace.
The maximum value that can be lost is known as the liquidation value, at this value, the exchange will automatically close the position, preventing the lender from losing any money. Because of this, positions taken at high leverage can easily be liquidated or subject to a margin call if the market quickly turns against you, leading to total loss of your initial margin. Overall, it is best to start slowly with Bitcoin leveraged trading, sticking with low leverage positions until you are more comfortable with the risks involved.
In most cases, Bitcoin margin trading exchanges will provide traders the additional margin needed to open a position, though this comes at a cost. Unlike standard trades which typically incur a simple trading fee, margin trades usually have an additional cost involved — funding fees. Funding fees typically run at a fraction of a percent, but are often cumulative, gradually increasing based on the length of time the position remains open.
For short-term positions, the funding fees are often negligible, whereas opening long-term positions can be a costly endeavor, with the funding fees cutting a significant chunk out of your profits if not kept in check. As with any investment, it is wise to know your market before risking your money.
Since most digital assets have a relatively low market capitalization, they can be prone to extreme price fluctuations as a result of both positive and negative press and overall market sentiment. This volatility can be considered both a curse and a blessing for margin traders, since it allows traders to confidently both short and long Bitcoin and other cryptocurrencies. Opening a long position essentially means you expect the price of Bitcoin or another cryptocurrency to increase in the future.
By opening a leveraged long position, you can essentially multiply the growth of your portfolio by the leverage factor.
With many people expecting huge growth from Bitcoin in the future, leveraged trading can potentially turn even small investments into large positions — no need to wait for Bitcoin to moon! In contrast to long positions, shorts are a bearish position, with traders expecting an asset to decrease in value over the length of the contract.
Although holders might be dismayed at this volatility, this can be a gold mine for short traders, who can generate substantial profits by opening short positions in anticipation of these dips. Hedging is used to minimize exposure to risk when trading, typically by opening a short hedge to protect against the risk that an asset might decrease in value in the short-term. Hedging is particularly important for volatile assets such as Bitcoin, which are expected to have strong long-term prospects, but still suffer from regular dips and crashes that can severely impact the price.
By carefully opening short positions during transient price dips, traders can effectively reduce their downside risk if they already have a long position open.
However, this can usually be circumvented by indirect hedging, e. As with all investments, it is wise to exercise caution first and foremost, as while it is quite possible to make substantial profits, soul-shattering losses can also be one bad move away. Because of this, we recommend taking the time to carefully research all the moving parts involved with crypto margin trading, including the exchange platform you intend to use, the price history of the asset you intend to trade, and the risks involved in doing so.
With that said, here are our top 3 tips to get you started on your journey:. Although it might be tempting to open a trade with extremely high leverage to take advantage of some price movement, doing so can expose you to avoidable risks. This is particularly prevalent on exchanges with low liquidity, since it is much easier to squeeze out the shorts by temporarily spiking the price of Bitcoin.
Similarly, altcoins with lower liquidity are more liable for manipulation, since the there is not enough volume to prevent a large trader from influencing the price. In light of this, we recommend sticking to a relatively low leverage, particularly when trading on a less established platform.
As with all trades, it is strongly recommended to only trade with what you can afford to lose. Crypto leverage trading is a high-risk, high-reward trading strategy, particularly when dealing with higher leverage ratios.
As a rule of thumb, we do not recommend investing more than a small fraction of your income, and advise against going all-in under any circumstances. Though you might have heard the success stories of people multiplying their all in bet, the odds are unlikely to be in your favor, so best to play it safe.
If you find yourself risking money as a means to get out of debt, or pay the bills, then it is wise to avoid leveraged Bitcoin trading, as things can go from bad, to terrible at the drop of a hat. One of the most important considerations when margin trading is choosing a good exchange to work with. Typically a good exchange is one that is defined as having excellent liquidity, high volume, and strong security.
Do not make the mistake of confusing popularity with security, as this is often not the case. Excellent reputation and a solid security record go a long way with crypto investments, so be sure the platform you choose to work with has both.
First of all, before choosing a margin exchange, please carefully consider if you are qualified enough to trade with leverage. Margin trading is extremely risky, and more so in the highly volatile world of Bitcoin and altcoins. If you have a solid risk management plan and decide to move forward, you will need to chose what you value more in a margin exchange: Liquidity and low fees, or ease of use.
If you are a professional trader and prioritize liquidity and low fees, then advanced exchanges like BitMEX and Deribit are your best option. If, on the other hand, you are just getting started and want to use a more intuitive exchange, then a beginner exchange like eToro is a good option for you. Feel free to ask any unanswered question you may have in the comment section below.
We try to reply to every single comment. Previous Next. All this information is really very helpful for all bitcoin and crypto margin trading exchanges users. Thanks for sharing such useful ideas here. Thank you for your informative article.
CoinDiligent is the go-to resource for cryptocurrency traders. We write in-depth trading guides, valuable exchange reviews, and share priceless trading tips from top crypto traders. Its still an exchange that strives to improve and innovate, offering a better experience to traders as time goes on.
If you are looking to limit the cost of your crypto trading activity, Poloniex is a fantastic choice. You will pay far lower fees than are found elsewhere. Poloniex is its range of different cryptocurrencies on offer. At the time of writing, the platform offered over 50 different options. Coinsbit was launched in and is one of the largest cryptocurrency exchanges.
The platform has over 1. In , the crypto exchange passed successfully an independent and specialized examination by the European specialized agency and was assigned one of the highest levels of security.
Bittrex was launched in The exchange is supporting cryptocurrency, tokens, stable coins and fiat. Bittrex offers a high level of security, UI, selection of assets, and helpful customer service. The exchange is perfect for both institutions and individuals. It already has more than one million registered users.
The exchange is supporting fiat and cryptocurrency. A key feature is its customer support team. Bitvo launched in and is a relatively young Canadian crypto exchange based in Calgary, Alberta. Founder of the platform are all ex finance service employees with experience in Trading Risk Management and Banking. The CoinEx crypto exchange is Hog Kong based. It was launched in and In the exchange began offering trading with leverage.
It offers high security, user friendly interface, low fees and fast cryptocurrencies platform. The exchange is not yet registered. Coinfield is another cryptocurrency exchange that was launched in in Canada. These are extremely important factors when you choose a crypto trading exchange. BitMart is a premier crypto trading platform which ranks amongst the top 10 exchanges in the world.
Bitstamp was launched in and is based in UK. The exchange is supporting crypto currency and fiat trading. Bitstamp is highly popular among experienced and intermediate traders. Overbit is registered in the Seychelles and is run by Abberton Trading Limited. Chieh Liu is the CEO who has a background in technology and finance ventures.
Overbit is an easy to use platform which is suitable for beginner, intermediate and also experienced traders. It offers some of the popular perpetual swaps and contracts. It also offers demo trader account for free so users can practice before they start live trading.
Each user of the free demo account is given eight virtual BTC to practice trade and get to know all of the trade functions. Deribit is options and futures trading platform that is based in Panama. The options offerings for both BTC and Ether are also available at Deribit — both of them cash settled. The options contracts are European style traded which means they are exercised only at expiration. Block trading is also offered allowing companies to make big, not public transactionsat agreed prices via partnership with Paradigm.
Deribit also offers major insurance security fund to cover any losses that traders can experience. Despite the many choices it offers, Prime XBT is extremely simple to use and even beginner traders can start trading in minutes. The exchange gives the possibility of trading with up to X leverage and also up to X leverage for Forex trading.
The main aims that Prime XBT is trying to achieve are decreasing the KYC process approval times, solving problems for markets that are failing, not good EE, and battling high exchange fees. Coinbase is one of the most popular and well known crypto exchanges. It was launched in San Francisco in and currently operates in 32 countries globally. In the exchange was known as the largest worldwide.
Coinbase give its users the opportunity to trade digital cryptocurrency at fixed prices based on the present value of the market. This is the feature that allows traders to buy cryptocurrency faster than any other crypto platforms.
In , Coinbase made an announcement to additionally support the ERC20 tokens. BitMax is a Singapore based crypto exchange that was launched in There is also a mining transaction type of model providing full reimbursement of trading fees in BTMX — the BitMax native token.
BitMax offers market, limit, stop market and stop limit trading. In Huobi became a Hong Kong publicly listed company. The company also operates as a research and blockchain consulting platform.
After all, there are a wide range of different types of trading out there. What are some of the main reasons you should invest your time and money into crypto margin trading? Like any type of serious trading, it pays to have a good strategic approach before getting started. This is especially true in the world of crypto margin trading. Conventional stocks and shares tend to move in a lot more conservative ways than crypto.
Cryptocurrencies are prone to lose or gain massive amounts of value in a short space of time. The extremely high level of volatility found in crypto trading, when compared to other types of trade, means that there is serious potential to make large levels of profit or loss quickly.
It is therefore essential to have a solid strategy in mind before you get started with crypto margin trading. Basically, taking a long position in an asset, including a cryptocurrency, means that you expect the value of that asset to increase in the future.
You are effectively predicting that the price of the cryptocurrency will be greater at some point in the future than it is now. A leveraged long position allows you to experience a far greater rate of profit from this increase than you would if you made an unleveraged long trade. If you felt sure that the price of the cryptocurrency was about to dip, you would open a short position.
This would result in your profiting if the cryptocurrency price fell as you had anticipated. By making a leveraged short trade, you are able to short a larger amount of the crypto than if you were restricted to your own funds.
This allows in a higher level of profit. Say, for example, that you had a long position in a particular cryptocurrency, and you felt fairly sure that its value would rise over a period of time. However, you are well aware of the volatile nature of the crypto market. Although you expect the price to rise in the long run, you are well aware that it could dip in the short term.
To protect against your losses in such a scenario, you open a relatively small short position in the cryptocurrency. This helps to limit your losses should the crypto lose value before it eventually gains, in accordance with your primary long position.
However, there are a couple of ways you can get round this restriction. One is to open conflicting positions in a crypto and currency pairing, using different currencies.
For example, you might go long on the value of Bitcoin to the dollar, but short on Bitcoin to the euro. Fluctuations in the currency markets can reduce the predictability of this approach, however. The other way to get around restrictions on hedging is to open different positions on different exchanges. For example, you take a long position on one exchange, and a short position on another.
This is a more predictable form of hedging which gets around any restrictions from a single exchange platform. At this point in our guide to crypto margin trading exchanges, you are probably ready to get started! You understand the pros and cons of the various trading exchanges, you know the overarching strategies you can employ, and you are eager to take your first position.
With that principle in mind, here are our top tips to allow you to start crypto margin trading in the most effective and enjoyable way possible. It can be tempting to go for the highest level of leverage available.
After all, the potentially huge profits are one of the main attractions behind crypto margin trading. The more leverage you have, the more vulnerable you are. Some exchanges are subject to artificial manipulation of the crypto price in order to hurt overly leveraged traders.
As a guiding principle, if you have experience with leveraged trading of any type, you can afford to take greater levels of risk with the amount of leverage. Also, if the exchange you are trading on has a higher level of liquidity, you can afford to take greater risks in terms of your leverage level. Crypto margin trading is a high risk form of trading.
Like everything in life, the high level of risk is accompanied by potentially high rewards. You should never rely on profits from crypto margin trading as a primary form of income, or to meet debt ot any other type of obligation.
However, as a way to potentially make epic levels of profit with your disposable income, go for it! The online world if often an unscrupulous place.
Not all crypto margin trading exchanges use the same levels or types of security, You want to check out how long any given exchange has been operating, and what its security record is. Has it ever been compromised? What corrective action have they taken to ensure that similar exchanges do not occur? Do not get drawn in by marketing promises and general popularity. Ultimately, the security of your money is far too important to take any shortcuts on.
In order to trade with margin, you will need to open a margin account. This is different from a regular cash account, in which you trade using the money in the account. You can keep your loan as long as you want, provided you fulfill your obligations such as paying interest on time on the borrowed funds.
A good example is: forex leverage represents the ability of trader to place trades 50 times more than their actual capital. In Bitcoin trading market, liquidity providers lets users open leveraged positions by providing their funds. Leverage is the strategy of using borrowed money to increase return on an investment. If the return on the total value invested in the security your own cash plus borrowed funds is higher than the interest you pay on the borrowed funds, you can make significant profit.
Shorting bitcoin on cryptocurrency exchanges functions in the same way as shorting bitcoin using CFDs. When you short sell bitcoin on a cryptocurrency exchange, you are selling bitcoin you do not own.
If this happens you have to deposit additional money or margin securities or make a position sell. You are not allowed to borrow against securities in order to make a purchase. Nevertheless, when you perform margin account trading you have the option to leverage equity in the securities you have in order to buy more securities.
To buy on margin is to request money from dealer in order to buy some stock. Margin trading offers higher profits potential than regular trading therefore it is riskier. When you margin purchase stocks the loss effect is increased. The return of equity in a company increases as leverage is increasing the volatility of stock, therefore the level of risk is increasing which leads to increased returns.
One of the key factors for choosing a crypto margin trading exchange is finding a good fit between the preferences of the trader, and the unique selling points offered by any particular exchange. I like the focus on the different trading exchanges here, as it allows me to picture which would be a good fit for my own set of.
I wish the ultimate success to every other crypto trader out there. We are the revolution my friends, and we are not going anywhere. Big regret! However, we change our views as time goes on. Nothing is ever easy.