Margin trading Bitcoin and other cryptos by taking huge leverage is slowly becoming the new trend.
The fact that you are here tells me you have figured that out and wish to participate in Bitcoin leverage trading.
Though Margin trading Crypto like Bitcoin (BTC) and leverage might seem attractive it matters a great deal where you trade.
So based on our experience here are some of the best exchanges for Bitcoin trading on low margin and high leverage:
I know many might have heard that Bitcoin Margin trading is the quickest way to earn a lot of money but let me tell you it is also the quickest way to lose your money, if not done right.
So trade responsibly and don’t keep your house or spouse on the mortgage to trade Bitcoin and crypto with leverage of 100x.
2020’s Top Crypto Margin Trading Exchanges For USA Customers
Let’s get started with the list of Best Bitcoin Margin Trading Exchanges with Leverage to trade:
#1. PrimeXBT Margin Trading
PrimeXBT has scintillated the margin trading for millions of crypto enthusiasts.
PrimeXBT is a rapidly growing Bitcoin-based margin trading platform that offers instant access to over 30+ assets including Crypto (Bitcoin, Ethereum, Litecoin, Ripple, EOS), and much more.
Now using PrimeXBT you can get up to 100x leverage on BTC, ETH, XRP, LTC and many more favorite cryptocurrencies of yours. Go long or short whenever you wish based on the TA trading strategy done on the clean UI of PrimeXBT.
Execute 5 types of advanced orders to get the maximum out of your trades with no KYC and almost instantly approved the margin trading account with the lowest fees forever.
Trade cryptocurrencies, stock indexes (S&P500, FTSE100), commodities, and forex all through one single Bitcoin-based margin trading platform.
#2. Bitmex Margin Trading
BitMEX is a dedicated Bitcoin and cryptocurrency margin trading exchange.
BitMEX is a pioneer in margin trading of cryptocurrencies since 2015 and is comprised of a dedicated team of developers and economists, rightly needed for this kind of business.
#3. BaseFEX Margin Trading
BaseFEX is a crypto derivative exchange unlike any other as it is developed by professionals of the financial industry. It is relatively new but boasts to provide margin trading for BNB, HT, OKB, LTC, TRX, BCH, ATOM which includes ERC20 tokens also. And this isn’t available anywhere else.
Apart from that, it has a secure, reliable, and extremely speedy order matching engine to help you trade perpetual contracts for almost all popular coins with leverage of 20-100x and place a long/short position on any of these pairs at any price.
Also, it has the world’s lowest taker fee especially for BTC/USD pair and the UI very neat in comparison to its other peers so do try BaseFEX once.
#4. Kraken 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 to place a long/short position on any of these pairs at any price.
Lastly, Kraken’s trade support is quite proactive in supporting its users, so feel free to margin trade on this exchange as there is an ample amount of liquidity too.
#5. Binance Margin Trading
Binance is the biggest famous altcoin and cryptocurrency exchange for spot trading, but it didn’t use to provide margin trading for cryptocurrencies until recently.
Binance broke to the margin trading sphere recently and in just a few months the trading volume of its margin products has overtaken the spot trading volume.
Though as of now, Binance only provides one pair BTC/USDT it has become a go-to margin trading platform for those who want to leverage trade Bitcoin.
The liquidity is enormous plus the brand name itself is trustable around the world. The funds are backed by SAFU and they also have their Android app from where you can do Bitcoin leverage trading.
Binance 125x leverage on Bitcoin futures is the highest in the industry.
Though they started with BTC/USD pair now new crypto pairs with leveraged trading features on Binance are available. These pairs are ETH/BTC, BNB/BTC, LTC/BTC, etc where you can place a long/short position on any of these pairs at any price.
#6. CEX.io Margin Trading
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 to place a long/short position on any of these pairs at any price.
#7. Poloniex Margin Trading
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. So you can place a long/short position on any of these pairs at any price.
#8. Bittrex Margin Trading
Bittrex is a famous altcoin and cryptocurrency exchange, but it doesn’t provide margin trading for cryptocurrencies yet. When it does, TheMoneyMongers will be the first one to tell you 🙂
What Is Bitcoin Margin Trading?
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 leverage trading them 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.
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 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.
How Does Crypto-Margin Trading Work?
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 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 leveraged 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 or leveraged trading to crypto/Bitcoin 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 $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 an 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 !!
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 losses for the lender?
Well, here comes the dedicated margin trading cryptocurrency exchanges which I had listed above.
So that’s all from us in this massive guide on which crypto margin/leverage exchanges are the best.
But I do have some words of wisdom for novice crypto investors:
If you are not comfortable with the wild volatility of crypto, do not trade bitcoins or any cryptocurrencies and don’t even think about trading cryptocurrencies on margin.
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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