Best Margin Trading Bitcoin & Crypto Exchanges In 2019

Note: This is a comprehensive guide on cryptocurrency margin trading, so if you already know about it then you may skip this introduction and directly jump to crypto margin trading exchanges section to learn how & where to margin trade Bitcoin & other cryptocurrencies?

But if you want to understand the nuts and bolts of cryptocurrency margin trading then stick around as I am going to unwind everything from the beginning.

So let’s get in with this fact:

Cryptocurrency trading is risky, but crypto margin trading is even more dangerous.

That’s why you should think twice before getting into crypto trading and think thrice before indulging in the margin trading of cryptocurrencies.

I know:

Many of you might get lured into crypto trading because of the stories you hear from your friends and how they turned $1000 to $10,000 in a matter of weeks !!

But on the flip side, they forget to tell you to tell you how much risk they have taken to achieve these kinds of returns and what are its downsides…

That’s why in this guide let’s try to understand margin trading in cryptocurrencies, its risks and how, if it used correctly, it could serve you achieve your investment goals.

What Is Bitcoin (BTC) Margin/Leverage Trading?

Cryptocurrency and Bitcoin margin trading is the new hype that is catching up along with regular trading.

But what is it?

Well, to know that we first need to understand, Margin Trading.

Margin trading is the act of trading (stocks, bonds, or cryptos) using the borrowed money.

And since the borrowed money is available to you because you already have a certain reserve of money that’s why it is also called leverage trading.

This breed of trading is a very common practice in traditional markets, and it originated first from the US. But nowadays, this is not only limited to the US as it has already spread across other traditional markets around the world.

And now, this concept is being borrowed by the cryptosphere to introduce cryptocurrency margin/leverage trading to crypto traders where one can borrow extra bitcoins or cryptocurrencies based on their already existing holdings.

Still, it doesn’t make sense?

Well, let me give you a simple example:

Let say you want to buy bitcoins worth of $10,000, but you have only $1000 at your disposal. So, now you decide to margin trade using the leverage ratio of 100:1 (100x means for every dollar you already have, you will get 100 dollars extra to invest).

Now picture this:

The next morning, after you have placed your margin trade, BTC’s price increases by 50% and so does your initial investment, which is now $15,000. (assuming 1 BTC= $10,000, when you had placed your trade). Now you can close your trade by liquidating your position and pay back the extra $9000 to the lender which you have effectively leveraged on your initial reserve of $1000.

So simple maths, you are now left with a profit of $5000 [$15000-($9000+$1000)] which you have earned by leveraging on the initial $1000 you had.

But this is a hunky-dory scenario.

On the flip side, you could have lost everything including your $1000.

Let see how that can happen:

Let say the price of BTC decreases %50 after you have made your trade and in this case, your initial investment is reduced to $5000, and now the lender needs to be protected. So this remaining $5000 goes to the lender and you are left with nothing.

One would argue that in this scenario the lender has also lost extra $4000 out of the original $9000 that he/she had lent, but in real life, the position is closed well before a 50% drop happens, thus saving the lender’s capital contribution.

So realistically in the above scenario, the position would have been closed on a 10% BTC drop only and the lender would have got his/her $9000 back !!

Bottom line:

If the market moves in your favor, your profits are magnified as per your leverage, and if the market goes against your position, your losses too are magnified.

But after I learned about margin trading of cryptocurrencies, I was thinking, who lends to these risky margin traders and why?

And upon further digging, I could find this:

Who Lends To Margin Traders & Why Do They Engage In Margin Trading Of Cryptos?

Margin traders engage in margin trading to maximize their profits with little money/cryptos at their disposal.

On the other hand, the majority of margin traders are veteran traders who understand the dynamics of the market and thus back their technical analysis. (I know there are newbies too, more on that later !!)

Of course, this doesn’t mean that they cannot go wrong and they also do!!

Brokers or people who want to earn an extra percentage of income on their cryptocurrency or Bitcoin holdings usually lend to these margin traders for a flat fee or interest rate.

So whenever the portfolio of a margin trader is performing well, these lenders keep getting the promised fee or interest rate on their lendings.

While on the other hand, if the portfolio performs poorly then the position is automatically closed and remaining funds plus the interest returned to the lender.

Now, I know some of you might be wondering how that happens automatically and who closes the position to reduce further loses for the lender?

Well, here comes the dedicated margin trading cryptocurrency exchanges.

Best Bitcoin & Crypto Margin Trading Exchanges

Here are some of the most popular cryptocurrency margin exchanges:

  • Whaleclub Margin Trading

Country Available Worldwide
Whaleclub Margin Trading Currencies BTC/USD
Whaleclub Margin Limits/Leverage Up To 200x
Whaleclub Margin Trading Fees 0%
Whaleclub Margin Trading Minimum 0.01 BTC
USP 30% Bonus on 1st Deposit

Whaleclub is one of the most popular margin trading platforms for cryptocurrencies, commodities, and forex.

It is operating in this space since 2016, and you can trade BTC, ETH, LTC, or DASH on its classical exchange and BTC/USD for margin trading.

  • CEX.io Margin Trading

Country Available Worldwide Except for the US
CEX.io Margin Trading Currencies
BTC/USD,ETH/USD, BCH/USD, BCH/BTC, BTC/EUR, ETH/BTC
CEX.io Margin Limits/Leverage Up To 3x
CEX.io Margin Trading Fees 0.1-0.2%
CEX.io Margin Trading Minimum 0.01 BTC
USP Closing fee is 0%

CEX is another reputed cryptocurrency exchange based out of the UK, and now it is providing margin trading of cryptocurrencies too.

It is operating in this space since 2014, and you can trade BTC/USD, ETH/USD, BCH/USD, BCH/BTC, BTC/EUR, ETH/BTC as of now on its margin trading platform.

  • Bitmex Margin Trading

Country Available Worldwide Except for the US
BitMEX Margin Trading Currencies
BTC/USD,ETH/USD, ADA, BCH, EOS, LTC, TRX, XRP
BitMEX Margin Limits/Leverage Up To 100x
BitMEX Margin Trading Fees 0.025-0.075%
BitMEX Margin Trading Minimum 0.01 BTC
USP Closing fee is 0%

BitMEX is a dedicated Bitcoin and cryptocurrency margin trading exchange.

BitMEX is a pioneer in crypto margin trading since 2015 and is comprised of a dedicated team of developers and economists, rightly needed for this kind of business.

And the good thing is that users who sign-up using this exclusive link will receive a 10% fee discount for six months and believe me 10% is a lot when you see it over a period of time.

As of now, you can trade BTC/USD, ETH/USD, ADA, BCH, EOS, LTC, TRX, XRP on its margin trading platform.

  • kraken margin Trading

Country Available SEPA Countries & The US
Kraken Margin Trading Currencies BTC,BCH, ETH, ETC, XMR, XRP, REP
Kraken Margin Limits/Leverage Up To 5x
Kraken Margin Trading Fees 0.01-0.02%
Kraken Margin Trading Minimum 0.01 BTC
USP EUR Margin Trading

Kraken is one of the biggest cryptocurrency exchanges in the world operating in this space since 2014.

Kraken is a US registered entity based out of San Francisco, USA and is one of the very few US exchanges that allow margin trading for the US crypto investors.

As of now, you can trade BTC, BCH, ETH, ETC, XMR, XRP, REP on its margin trading platform against BTC, ETH, USD and EUR pairs.

Lastly, Kraken’s trade support is quite proactive in supporting its users, so feel free to margin trade on this exchange as there is ample amount of liquidity too.

  • Poloniex margin Trading

Country Available Worldwide Except for the US
Poloniex Margin Trading Currencies XMR, LTC, ETH, XRP, DASH, etc
Poloniex Margin Limits/Leverage Up To 2.5x
Poloniex Margin Trading Fees 0.1-0.2%
Poloniex Margin Trading Minimum 0.01 BTC
USP 10+ Margin Trading Pairs

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 can margin trade easily for 10+ cryptocurrency pairs, but all the pairs are in BTC.

  • Bittrex margin trading

Bittrex is a famous altcoin and cryptocurrency exchange, but it doesn’t provide margin trading for cryptocurrencies yet.

  • Binance margin trading

Binance is the biggest famous altcoin and cryptocurrency exchange, but it doesn’t provide margin trading for cryptocurrencies yet.

Conclusion: So Which Margin Trading Bitcoin Exchange Is Best?

So that’s all from us in this massive guide on crypto margin trading and crypto leverage exchanges.

But I do have some words of wisdom for novice crypto investors:

If you are not comfortable with wild volatility of crypto, do not trade cryptocurrencies and don’t even think about margin trading cryptocurrencies.

I am saying this not to frighten you but to give a head-ups because I have seen many people losing vast amounts of money in margin trading bitcoins/cryptocurrencies.

Lastly, never leave your cryptocurrencies on these exchanges as they are prone to hacks !!

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Categories Bitcoin

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