Crypto exchange giant Binance starts offering 125x leverage on BTC/USDT contracts after recently launching its trading platform and this decision spiked massive controversy and criticism from the crypto community. Let’s find out more about it in the Binance news below.
Starting from today, Binance starts offering the investors the possibility to trade with up to 125x margin and pick any leverage from 125:1 to 1:1 for BTC/USDT contracts. When using the highest possible leverage, the 100 USDT deposit will enable the users to hold 12,500 USDT in BTC. The CEO of the exchange Changpeng Zhao (CZ) explained:
‘’The performance of the Binance Futures systems far outstrips many other platforms in the market, giving users a smooth trading experience. The market has been demanding a product with superior stability and performance; now we are providing one.’’
CZ explained on his Twitter profile that the high-risk trading option is not really recommended for beginners. The exchange claims that it is using a sophisticated risk engine and liquidation model for the high-leverage trades. Despite this, most of the community criticized this addition hinting that Binance has become a platform for gamblers. It is true that given the insane volatility of cryptocurrencies and Bitcoin as well, 125x leverage could wipe any position within seconds. For most of the commentators, 125x and caution are not synonymous.
The crypto community thinks that Binance is very wrong in introducing the high-risk service for its own profit and at the expense of ignorant traders. The crypto exchange has been mostly about profit and in the last three years, CZ’s platform has generated more than $1 billion in cumulative profit or about $1.2 million in profits every day. The maximum leverage is aimed at advanced traders but they will be the last ones to choose this option. On the other side, CZ reacted by saying that Binance was offering multiple features and that the traders have to be responsible to choose what they like.
‘’Not every feature is for everyone. Some features, while not liked by everyone, are in high demand only for small selected groups. Please don’t use features you don’t like or need. As a platform, we have to provide choices to stay competitive.’’
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