Categories: Bitcoin Business

The Number of Crypto Exchanges Offering Margin Has Multiplied

Click here to view original web page at

Until recently, Bitmex, Deribit and a handful of established exchanges were the only places where traders could get their leverage fix. This has now changed with the emergence of dozens of exchanges offering leverage and plenty more on their way. Binance and Kucoin – two platforms famed for driving this year’s other exchange trend, the IEO – are believed to be mulling the introduction of margin trading. In 2019, it seems, everything’s being served with leverage.

Also read: Darknet Users Allege Wall Street Market Exit Scammed, Possibly Snatching $30M

Margin Trading Is so Hot Right Now

Margin trading and initial exchange offerings (IEOs) have proven to be the dominant trends among cryptocurrency exchanges this year. Bibox is the perfect case in point: the exchange, which offers up to 3x leverage on BTC, recently entered the IEO game, announcing the launch of no less than four projects on Bibox Orbit simultaneously to commence on April 22: The Force Protocol (FOR), Ludos (LUD), Staking (SKR), and X-Block (IX).

FTX is another platform that encapsulates one of 2019’s defining crypto exchange trends, in this case for leverage. The derivatives exchange, backed by trading firm Alameda Research, offers futures, leveraged tokens at up to 3x, and OTC trading. With leverage of anywhere from 2-100x, these exchanges multiply the thrill – and the risk – of going long or short on bitcoin and other digital assets. Where once traders had a handful of options, now there are dozens, as the number of platforms offering margin and derivatives products has proliferated.

The Number of Exchanges Offering Leverage Has Increased 10x

The Perils of Offering Leverage

On market data sites such as Coincodex, Coinlore, and Coinpaprika, the number of exchanges offering leverage now runs to more than 50. Some provide margin trading on leading coins such as BTC, ETH, and BCH, while others have gotten more adventurous, offering products such as leveraged futures on Telegram’s still unreleased gram token. For traders lured by the prospect of tripling their money through little more than cranking up a slider and letting the multiplier effect take care of the rest, there are a few perils to be aware of – aside from the obvious risk of being liquidated.

Bitmex takes pride in the size of its insurance fund, which currently stands at close to 24,000 BTC, but the majority of leveraged exchanges aren’t nearly so well equipped. With smaller exchanges, a large trader’s account going bankrupt can lead to clawbacks from other accounts to cover the loss. Poorly designed risk management systems exacerbate this risk. The complexities of offering leverage are significant, necessitating collateral to be posted for separate margin wallets for each digital asset. Newly launched futures exchanges also typically suffer from low volume and poor liquidity due to a small customer base, which in turn makes it more difficult to attract customer flow and market makers.

Okex rolled back its futures contracts following a massive liquidation in July 2018

It’s not just new exchanges that can get things from when it comes to managing margin, either: last year Okex suffered a $9M clawback after a trader placed a large BTC order and was then liquidated after the asset crashed. As FTX notes, “If a user has a leveraged futures position on and markets move against their account enough that their net asset value is negative, then someone has to pay for that loss.” It continues:

In crypto you can’t repossess assets from the bankrupt account’s owner from outside the system, so you’re stuck with other users — the users who aren’t getting liquidated — footing the bill.

With the public’s appetite for leveraged everything and IEOs for everything showing no signs of being sated, expect to see plenty more of both in 2019. In an increasingly competitive marketplace, with hundreds of platforms jostling to gain a foothold, margin, despite its hazards, is seen as a key way to attract traders and stay relevant.

What are your thoughts on the proliferation of exchanges offering margin trading? What’s your favorite platform for leveraged trading? Let us know in the comments section below.

Images courtesy of Shutterstock.

Need to calculate your bitcoin holdings? Check our tools section.

These Cryptocurrency Data Sites Aim to Be More Accurate Than Coinmarketcap
Up & Down: BTCP and ABBC Plummet Amid Controversy

Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Published by

Recent Posts

Watford FC to brand Bitcoin logo on the jersey

The initiative is being carried out as a part of a brand partnership with sports betting site's marketing… Read More

1 hour ago

Latest Bitcoin price and analysis (BTC to USD)

At the time of writing, Bitcoin (BTC) is trading at just above $10,300 after gaining about 1% since last week.BTC… Read More

1 hour ago

Johnstone: How To Defeat The Empire

Authored by Caitlin Johnstone via, One of the biggest and most consistent challenges of my young career so far… Read More

1 hour ago

Today’s Bitcoin Drop Driven by Massive Volume Influx

Bitcoin has been facing a bout of sideways trading for the past several days, but today’s drop to below $10,200… Read More

1 hour ago

L.A. to Choose Blockchain Pilot Project at CIS Conference

With a growing interest in blockchain solutions for government, the city of Los Angeles has partnered with organizers of a… Read More

1 hour ago

Bitcoin’s heading to a new all-time high along with the S&P 500, says Fundstrat’s Tom Lee

watch nowTalk about a bitcoin bull case.The digital currency is headed to new record highs, says Tom Lee, co-founder, managing… Read More

1 hour ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More