5 Bitcoin Margin Trading Platforms for 2022 | ZenLedger

Want to trade cryptocurrencies but have a limited amount of capital to work with? What if we told you that there is a way to leverage your long and short bitcoin positions for 2x, 5x, 10x or even 100x, without having to hold the capital required to open those positions? welcome to bitcoin margin trading!

This article will talk about the best bitcoin margin trading platforms among the various crypto margin trading platforms in the usa. uu. we’ve also included a list of the best tips for trading bitcoin on margin just for you!

Reading: Bitcoin margin trading

what is bitcoin margin trading?

Regarded as one of the most profitable and risky trading strategies, margin trading (or bitcoin margin trading as most people call it) allows you to trade with leverage by borrowing funds from the exchange.

  • all you have to do to get started is register with one of the exchanges and activate your margin trading account.
  • You can then apply for a loan on the platform and trade with the borrowed fund you receive.

For example, if you opened a bitcoin margin trading account with 2x leverage but bitcoin increased by 10%, your position will generate a 20% profit due to the 2x leverage. without leverage, it would have been only a 10% return on investment.

margin leverage can also be up to 25x and more, but with higher risks. the same position will now yield 250% (instead of 10% without leverage).

the pros and cons of crypto margin trading

To summarize, virtual currency margin trading could be very profitable, provide access to more funds, help diversify your positions and allow you to learn trading strategies. The reason behind the high profitability is the higher relative value of the trading positions. After all, margin trading is great for diversification as it helps traders open multiple positions with a small amount of investment capital.

But, as with all trading strategies, cryptocurrency margin trading is not without its drawbacks. it is highly risky, extremely volatile and can lead to significant losses. Unlike regular trading, a trader may face losses greater than their initial investment.

how does bitcoin margin trading work?

  • once you have activated your margin trading account and logged in, you will need to deposit some funds
  • then you can apply for a btc loan using your deposited funds as collateral
  • You will be charged interest every day, which is updated frequently based on the exchange

It should be noted that trading, by itself, does not present much risk as each position has its liquidation price, which is based on the level of leverage.

Isolated Margin Trading and Cross Margin Trading

Before we get to the best bitcoin margin trading platforms of 2022, let us quickly understand the concept and the difference between isolated margin trading and crypto cross margin trading.

what is isolated margin trading?

Isolated margin allows you to limit the risks of a trade by restricting the amount of margin on each position. this way, if your fund reaches the liquidation price, you will lose the funds on that particular position only.

what is cross margin trading?

When you trade cross-margin, you share your entire asset balance across all open positions in your margin account. You can avoid liquidation, as other positions can help the losing position. Cross margin trading is most popular with professional traders and investors who are hedging existing positions.

cryptocurrency spot trading versus bitcoin margin trading

Before we move on to exploring the best cryptocurrency margin trading platforms, let’s quickly understand what cryptocurrency spot trading is and how it differs from margin trading. Spot cryptocurrency trading, the most common and popular form of cryptocurrency trading, refers to the direct sale or purchase of a cryptocurrency.

so how is it different from bitcoin margin trading?

best crypto margin trading platform

There are many options available in the market, and we have listed the top 5 best bitcoin platforms for margin trading based on their features as follows:

1. binance margin trading

See also: Bitcoin Blowout: What The Heck Happened Last Week And Can We Blame China For It?

bitcoin margin trading on binance is spot trading with borrowed funds and higher risks. Binance is one of the largest crypto margin trading platforms in the US. uu. and one of the best margin trading bitcoins in terms of volume. With Binance, you can reduce your trading fee by 25%.

binance margin trading features

  • isolated margin trading
  • cross margin trading
  • no commissions for depositing funds
  • margin level
  • maintenance margin
  • industry leading security protocol
  • allows trading with a margin of 1:3 with bitcoin, ethereum, xrp, etc.

binance margin trading drawbacks

  • could be a bit overwhelming for beginners
  • all your margin orders go on the spot market
  • does not support most payment methods traditional

2. bityard margin trading

bityard, a singapore-based exchange, is ranked as one of the best margin bitcoin trading platforms on the market. they operate on isolated margin trading, helping you keep your entire fund safe even during liquidation. provides its services in more than 150 countries.

features of bityard margin trading

  • Isolated margin trading
  • Customizable and user-friendly interface
  • Market competitive trading rate
  • Own financial license in four countries

isolated trade

bityard provides you leverage services through isolated margin trading. As mentioned above, isolated margin trading allows you to use borrowed funds separately for each position, so you lose funds only from that particular position in the event of liquidation.

leverage in bityard

bityard provides you with up to 125x leverage on cryptocurrency margin trading and 200x on derivatives margin trading. you can adjust the leverage from the leverage slider.

bityard fees

You will be charged a fixed price on margin trading at the time you open a position. to calculate the margin trading fee:

(open/close fee = margin * leverage * 0.05%)

drawbacks of bityard margin trading

  • minimum trading amount of 5 usd
  • otc deposits available in some countries

3. kraken margin trading

kraken, a us based margin trading platform. USA, provides its services in more than 175 countries. allows you to expand your trades by allowing you to use more complex trading strategies.

kraken margin trading features

  • beginner friendly
  • among the safest crypto margin trading in the us. uu.
  • charges low fees on leveraged trades

trade on kraken

You can open a position at a lower price and then close it at a higher price. this is known as going ‘long’. while going ‘short’ involves opening a position at a higher price and closing it at a lower price. the first works with or without margin; however, the latter only works with margin trading.

kraken margin trading drawbacks

  • provides a maximum leverage of only 5x
  • slow verification process

4. bitmex margin trading

One of the best bitcoin margin trading platforms is seychelles based bitmex. they offer a fast and secure platform for crypto market traders. the platform offers bitmex swaps and futures on its platform.

bitmex margin trading features

  • high leverage and liquidity
  • reasonable fees for marginal bitcoin trading
  • supports anonymity
  • no fees for deposits or withdrawals

Isolated and cross-margin trading on bitmex

let’s say you are using an isolated margin trade and you have 100 usdt in your bitmex account. let’s say the price of btc is 10,000 usdt. then you open a position worth 5 usdt and the exchange has a liquidation price of 9500 usdt.

When the price drops to 9000 usdt, all your 5 usdt will be liquidated but there will be no deductions from your principal balance. now, if you are cross-margining, you will suffer a larger loss, but you would not have suffered liquidation.

bitmex drawbacks

  • outdated user interface
  • the exchange is alleged to be involved in illegal activities

5. poloniex margin trading

poloniex is a seychelles based bitcoin margin trading platform offering lending, spot trading, margin trading and staking. As of March 2021, Poloniex was ranked 13th in crypto margin trading in the US. uu. by volume of value in dollars according to coinmarketcap.

poloniex margin trading features

  • high liquidity
  • no verification needed
  • chat function

operate in poloniex

At poloniex, your initial margin and maintenance margin levels determine your leverage, and you can get up to 100x leverage. it has a tier-based fee system, and you can also apply for silver and gold tiers.

disadvantages of poloniex margin trading

  • hacked in 2014 and loss of 12% of user assets
  • high interest rates on loans

Is it safe to trade cryptocurrencies on margin? the risks of bitcoin margin trading

Before you make a margin trade on any trading platform, make sure you know that leveraged trading amplifies both profits and losses. when the crypto markets move in your favor, you will enjoy higher profits. on the other hand, however, you will also be prone to big losses if the price moves in the opposite direction of your prediction. therefore, margin trading is not suitable for anyone new to crypto trading.

See also: How to Accept Bitcoin Payments with BitcoinPay

It should also be noted that as a margin trader, you will be required to hold a certain percentage of the value of your position on the exchange at all times in order for that position to remain open. Should you experience a loss on your position that exceeds a certain limit, known as the settlement price, your order will be automatically closed.

only 23 states in the us. uu. allow margin trading

selected merchants in 23 us states only. uu. they can use 3x leverage on margin trading. Additionally, for licensing reasons, Coinbase Pro is available in the following 23 states:

new jersey, west virginia, colorado, south carolina, wyoming, illinois, arkansas, connecticut, oklahoma, utah, new hampshire, nebraska, texas, massachusetts, virginia, florida, maine, north carolina, georgia, wisconsin, kansas, arizona and oregon.

what if i use a vpn to trade on margin?

Most of us traders ask ourselves the question: where can we citizens trade cryptocurrencies with leverage?

Nearly all cryptocurrency exchanges and trading platforms have mentioned in their terms of service that US citizens and residents are not allowed to margin trade cryptocurrencies.

When US citizens and residents sign up with crypto margin brokers, they receive a notice that this service is not allowed in their country. Technically, a US citizen can bypass this by using a VPN. however, doing so is a clear violation of the law and therefore not recommended. If the platform discovers that a merchant is a US resident, it could freeze their account and funds. In addition, there could be legal action against the merchant.

top tips for cryptocurrency/bitcoin margin trading

1. reconsider if you are a new trader

If you are new to cryptocurrency trading or cryptocurrencies in general, margin trading is probably not the right thing for you. it is a high-risk approach best suited to experienced traders.

2. always start small

trading on margin on day one? start small. gain the necessary confidence you need before jumping into the deep and raging waters of leveraged trading.

3. don’t go all in at once

If you are unsure of your trading skills, it is best to split your position into portions and create a price scale. In this way, you can reduce risk while averaging the entry price of the position. the same applies to taking a profit: set up a ladder of take profit levels.

4. highly volatile

Cryptocurrency trading can have extreme fluctuations that occur in both directions. the risk factor is that the depth will touch our liquidation value. can occur when leverage is relatively high, so liquidation value is relatively close.

5. risk management

When trading bitcoin margin, set clear risk management rules and beware of excessive greed. When considering how much you’re willing to risk, remember that you can lose completely. set clear levels to close positions, take profit levels, and most importantly set stop-loss levels.

end result

The benefits of leveraged trading are very clear and another important benefit comes from the security aspect. But even the best bitcoin trading platforms on margin are a risk. If you are new to the world of cryptocurrencies and cryptocurrency trading, and would like to margin trade cryptocurrencies, start by doing a lot of research. Compare the fees and features as well as the pros and cons of various margin trading platforms to find the one that best suits your needs.

zenledger easily calculates your crypto taxes and also finds opportunities for you to save money and trade smarter. Get started for free now or learn more about our plans prepared by tax professionals!

See also: 2022 Virtual Bitcoin Summer Camps | Tech Revolution Online

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