Are you interested in trading cryptocurrencies but lack the capital to do so? If we told you there was a way to multiply your long and short Bitcoin positions by a factor of two, five, ten, or even hundred times, without having to hold the capital required to open the positions? We welcome you to the world of crypto margin trading!
The purpose of this article is to discuss which are the best bitcoin ethereum margin trading platforms among the various platforms available for crypto margin trading.
What Is Bitcoin Ethereum Margin Trading?
The margin trading strategy (or the Bitcoin margin as most people refer to it) is considered to be one of the most profitable and riskiest trading strategies since it allows traders to borrow capital from the exchange to leverage their trades.
- Sign up for one of the exchanges and activate your margin trading account to get started.
- Next, you can apply for a loan on the platform and trade with the borrowed funds.
As an example, if you opened a Bitcoin margin trading account with a 2X leverage and the Bitcoin increased by 10%, your position would yield 20% profit because of the 2X leverage. With no leverage, it would have only yielded 10% ROI.
Similarly, margin leverage can be as high as 25X, with higher risks. The same position will now yield 250% (instead of 10% without leverage).
Pros and Cons of Margin Trading Cryptocurrency
Outlined below are the advantages and disadvantages of crypto margin trading, similar to any other trading strategy:
Pros:
- Margin trading enables users to achieve significant profits in a short span of time.
- Large positions can be opened with minimal capital.
- Profits can still be made even when the market moves are small.
- Margin trading enables users to keep fewer funds on a crypto exchange.
Cons:
- Despite the high profitability, it is linked with significantly high risk.
- There is a possibility of losing all invested capital at an expedited pace. In times of volatile markets, trades may be liquidated before traders react.
- It’s essential to have perfect timing to open a position in the market.
- Inexperienced traders who leverage trade will experience heavy losses if they don’t exit the position while it’s profitable.
5 Best Platforms for Bitcoin Ethereum Margin Trading
1, BTCC
Website: https://www.btcc.com/
BTCC is a well-known cryptocurrency exchange that was founded in June 2011. The platform aims to make crypto trading reliable and easily accessible for everyone. With crypto licenses in the US, Canada, and Europe, BTCC has been providing safe trading services with top-notch technology for over 12 years. It has persevered through the ups and downs of many market cycles and is the world’s longest-running crypto exchange. BTCC continuously works towards creating a fair trading atmosphere for all crypto enthusiasts worldwide by prioritizing the improvement of every aspect of trading. Overall, BTCC is a reputable exchange that strives to meet the needs of its users.
2, Poloniex
Website: https://poloniex.com/
Poloniex is a Bitcoin margin trading platform that offers a variety of features such as lending, spot trading, margin trading, and staking. It is based in Seychelles and currently ranks 13th in crypto margin trading in the USA by dollar value volume according to CoinMarketCap. One of the key features of Poloniex is its high liquidity, making it easier for traders to execute their trades smoothly. Another unique aspect of Poloniex is that no verification is needed, allowing users to remain anonymous if they choose. In addition, the platform has a chatbox feature which enables real-time communication among traders. At Poloniex, leverage up to 100X is possible, depending on the initial margin and maintenance margin levels. Furthermore, it offers a tier-based fee system, as well as silver and gold tiers for eligible traders. Overall, Poloniex is a robust trading platform with various features that cater to the diverse needs of its users.
3, Binance
Website: https://www.binance.com/
The Binance exchange was founded by Changpeng Zhao in 2017 and has since become one of the largest and most popular exchanges in the world, offering a wide range of trading services, including margin trading in the cryptocurrency market.
Binance’s popularity guarantees an abundance of buyers and sellers, so orders fill rather quickly, thanks to its trading fees of up to 0.1% and its support for more than 600 assets.
On Binance, margin trading is an option where users can borrow money to increase their trading power and potential returns. In order to participate in margin trading on Binance, users need to transfer funds to their Margin Wallet and choose the pairs they wish to trade.
Users can choose between isolated margin trading and cross-margin trading on Binance. Isolated margin trading offers 10x leverage while cross-margin trading offers 3x leverage.
A flexible interest rate system is also available on Binance margin trading, based on a tiered structure depending on the amount borrowed and the duration of the loan. Binance charges interest on a 24-hour basis, based on the amount borrowed. The longer the loan period, the lower the interest rate.
3, Etoro
Website: https://www.etoro.com/
It has been around for a long time and has grown to become one of the most recognizable financial brokers in the world. Since its launch in 2007, eToro has provided over 13 million users with access to a wide range of trading tools. In the beginning, eToro offered margin trading for other asset classes, but eventually for cryptocurrencies as well.
When safety is your top concern, eToro holds licenses from the Financial Conduct Authority (FCA), the Financial Crimes Enforcement Network (FinCEN), and the Australian Securities and Investment Commission (ASIC). In order to do business there, the broker must follow anti-money laundering and counter-financing of terrorism regulations.
The fact that eToro doesn’t accept as many altcoins as others does not mean it doesn’t support 16 of the best tokens on the market. Initially, the only way to invest in cryptocurrency was to use contracts for difference (CFDs). You didn’t buy any crypto, but instead pledged to cover the price difference if the asset’s value decreased or pocket the gain if it increased. As of 2018, however, eToro started enabling its customers to use its digital wallet to purchase and store cryptocurrencies.
4, Margex
Website: https://margex.com/
Margex is a new digital asset exchange that focuses on protecting all transactions between sellers and buyers. Besides its diverse payment options, Margex also offers a lot of useful extras.
Furthermore, they accept a variety of currencies for deposits and withdrawals, in addition to offering access to over 20 different trading pairs and round-the-clock client service. They also offer a way to transact business anonymously for those who do not want to reveal too much personal information. Even you can make trades while remaining anonymous.
In order to accommodate different types of trades, the exchange has maker and taker fees. Those willing to take the risk can receive leverage of up to 100 times their initial investment with maker fees of 0.01% and taker fees of 0.06%. You can withdraw up to $100,000 per day.
In terms of account security, Margex users have access to two-factor authentication. Exchange procedures adhere to KYC regulations regulated by the South Korean Financial Services Commission. All digital assets are stored in cold storage, completely safe from cyber thieves. In comparison with other cryptocurrency trading platforms, they offer a high level of security.
5, Bybit
Website: https://www.bybit.com/
It was founded in 2018 and quickly expanded to over 10 million members with daily trading volumes over $10 billion. Due to its dependability and trustworthiness, Bybit is the leading crypto margin trading platform. There is substantial liquidity, 99.99% system uptime, and 100,000 per second trade speeds for frequent traders.
Among the different platforms available, Bybit offers the maximum margin trading leverage, with a maximum of 100x, which is very generous when compared to some other platforms that only offer up to 5x. By raising the amount you can borrow, you will be able to maximise your returns despite minor price swings.
USDT Perpetual contracts, Inverse Perpetual contracts, and Inverse Futures contracts are among the derivatives markets offered by Bybit. Over 220 coins are available for spot trading as well.
