The largest cryptocurrency exchange in the world, Binance, has officially launched a margin trading platform which allows users to use 3x leverage on BTC trades. The headline is all over the latest cryptocurrency news and the Binance 2.0 platform is described as something revolutionary in the crypto community.
After the strong demand from traders, the Binance 2.0 margin trading platform was introduced as a way to allow users leverage their trades across six digital assets including Bitcoin (BTC), Binance Coin (BNB), Ethereum (ETH), XRP, Tether (USDT), and Tron (TRX).
#Binance Launches Margin Trading service for Evolving Cryptocurrency Traders
— Binance (@binance) July 11, 2019
The new margin trading functionality will allow Binance users to amplify their trades by borrowing funds.
As explained before in our altcoin news, if you trade $1,000 with 2x leverage, you are effectively trading with $2,000. In that way, the margin trading platform by Binance lets you leverage your gains where the risk is higher and the downside is also amplified.
The move also expands Binance’s dominance in the crypto exchange arena, pitching it as a direct competitor to platforms such as BitMEX which offers 100x leverage on Bitcoin derivatives. In a recent blog post, the CEO of Binance Changpeng Zhao said:
“This is another step in providing an inclusive cryptocurrency trading platform catering to the needs of both advanced institutional traders and retail traders under the same roof. We are providing a new tool in the financial services and cryptocurrency markets to help amplify trading results of successful trades.”
As we hinted, the margin trading platform is part of Binance 2.0 – a major upgrade from the existing system that comes with an optimized interface and an advanced trading engine for better order matching.
The co-founder of Binance, Yi He, recently acknowledged the dangers of margin trading. However, he also promised that sufficient risk management will be properly set up, stating:
“We are confident that its development coupled with more knowledge on proper risk management will help realize greater benefits in the long run… With margin trading being one of the most requested services from our community, this is a testament to the large market demand from retail and institutional traders alike and its promising possibilities in the future.”
As the coming altcoin news show, Binance is also working on a futures trading platform with 20x leverage.
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