In simple words, Margin Trading or Leverage Trading refers to the usage of borrowed capital for investing in cryptocurrency. If you are interested in dealing with cryptocurrency, leverage trading is ideal for you. It helps you to borrow capital from brokers to raise your buying capacity and offer higher profits. If you want to learn more about leverage trading, how it works, the pros and cons associated with it, keep on reading.
What Is Leverage Trading In Crypto?
Leverage Trading in Crypto denotes a tool that allows investors to make spot transactions (purchase and sale) with the help of borrowed capital from brokers. Usually, these funds exceed the account balance of the investors. Therefore, it is a perfect way of maximising profits by increasing purchasing ability.And the best part of this trading is that the investor can opt for this trading with a small amount of money. For general trading, you can't even imagine that! If you take an instance, a trader who enters a leverage trading with a $100 margin can trade up to 10 x margins, i.e., $10,000 margin size. However, you should note that Leverage Trading is subject to high risks, which can eventually lead to huge losses. That's why beginners are advised not to opt for this type of trading, as many experienced traders undergo big losses. However, experts in regular trading can invest in smaller amounts for margin trading in crypto.
Why Do Companies Invest In Margin Trading?
Companies that pass through capital deficiency can use borrowed capital from brokers to use in production. This acts as a revenue booster. Although, the risk also increases in case the business is not getting as much return as expected. Thus, there's a huge chance of ending up receiving more liabilities than assets. By now, you may understand that Leverage Trading acts as a two-edged sword. Here, not only your investment amount strengthens, but also your risks! This is because leverage trading in Crypto can only be appreciated if the market condition flows as expected. If it flows in contrast, it's not intended at all.
Top Exchanges For Crypto Leverage Trading
Here is a detailed list of the most familiar leverage trading cryptocurrency platforms used for buying and selling online assets using leverage. This assessment is based on several factors, including features, usage, leverage amount, fees, client assistance, and obscurity.
1. Binance
Since its formation in 2017, this platform has undergone skyscraping development. Right now, it is the world's biggest digital currency exchange platform with 1.4 million transactions/second. A user can use Binance leverage trading in android or iOS mobile devices. The easy user interface and smooth functioning make it the most used trading app.The app will allow you to check profit and loss, along with getting information about trade history. To avail of the Binance leverage trading facility, you must complete the KYC, i.e., identity verification, and most importantly, your native country must be excluded from the blacklist of Binance. Just be aware that, recently, Binance has stopped providing margin on AUD, EUR and GBP.
Features:
- Almost 200 different cryptocurrencies are used for trading
- Leading cryptocurrency exchange platform
- Facility to earn interest on cryptocurrency in the savings accounts of Binance
- Competitive deposit and withdrawal rates
- Able to Execute and manage orders
- Offers leverage up to 10 xs and 125 xs on spot transaction and derivatives trading, respectively.
2. ByBit
Established in 2018, this exchange platform ( both long and short coins) is specialised for derivatives trading. To access maximum liquidity for margin trading exchange platforms like Binance futures and Bybit are ideal. Moreover, beginners can easily use the ByBit mobile app for its smooth user interface and use its insurance funds to get over losses in case of bankruptcy. Based in Singapore, it has over 2 million active users.
Features:
- Fastest developing a cryptocurrency exchange platform
- Offers 24/7 client support in multi-languages
- Allows leverage up to 100x
- Zero server downtime
- Guarantees return of the total cost of financial loss in case of system error or server down
- Facilitates with a risk management tool
- Processing ability 100,000 transactions/second
- Stop loss and take profit order through a single click
3. FTX
If you want a cutting-edge crypto exchange platform, FTX is the ultimate destination for you. Formed in mid-2019, this particular platform allows insurance funds and an exceptional amount of liquidity for its users. US residents need to use FTX.US as FTX is not applicable to residents of the USA. Featured with 3 tier liquidity rule, FTX allows numbers of marginal tokens. Keep yourself updated with all borrowing rates, as this usually alters every single hour.
Features:
- Offers a large variety of leverage tokens
- Can access at first without identity verification or KYC
- Facilitates withdrawal capacity up to $2,000 on day basis
- Pro-level user interface that is available both on mobile and desktop
- The facility of trading directly on index futures
- Available to both crypto and future trading
By now, you can have a thorough idea of the world's best crypto leverage trading platforms. However, as these exchanges deal with a huge amount of money, the risk of money theft also increases. Therefore, be cautious on these platforms while dealing with any kind of leverage or day trading. On the other hand, the largest pros of using these above platforms are providing exceptional security features like 2-FA authentication.
Final Verdict
In the ongoing phase of a worldwide pandemic, using Crypto Leverage Trading is the finest way of earning digital money. However, users need to be aware of hackers to protect their used crypto exchange platform from unwanted hacking. For ultimate security, keep your money at these exchange platforms for as short a duration as possible. To keep your money safe, get your profit withdrawal by using a renowned cryptocurrency hardware wallet.
At the starting point, leverage trading seems a little bit daunting. But once you gain skills, you can be able to deal in a high yield market. Before opting for cryptocurrency trading, make sure to invest your valuable time to understand the unique features and risks associated with it. After immense research, you can learn the basic concepts of leverage trading from numerous sources, but invest your hard-earned money in the right platform. Investing smaller amounts in leverage trading would give you enough space to learn and reduce the risks of huge losses.
