How Tesla lost $140m on Bitcoin in 2022
01 Feb 2023
The best crypto margin trading exchanges:
|Exchange||Spot Trading Margin||Derivatives Trading Margin||Key Features|
|1. Binance||Up to 20x||Up to 20x||• Leading crypto exchange|
• Highest liquidity in the market
|2. Bybit||Not Applicable||Up to 100x||• Specialized derivative trading platform|
|3. FTX||Up to 20x||Up to 20x||• One of the best user interfaces and customer support in the market|
• Offers several unique products
|4. Kraken||Up to 5x||Up to 5x||• One of the most secure platforms|
• A good choice for US residents
|5. KuCoin||Up to 10x||Up to 100x||• Easy and simple to use|
• Offers several unique products.
|6. Bitmex||Not Applicable||Up to 100x|
|7. Phemex||Not Applicable||Up to 100x||• Negative Maker fee for derivatives trading|
• Several promotional bonuses
• No KYC
|8. CEX.io||Up to 10x||Not Available||• Exchange registered with FinCEN|
• One of the oldest exchanges in the market
Note: 10x means 10 times. For example, while placing a 10x margin spot trade a user needs to keep $1 as margin and can place the order worth $10. Here the exchange will lend $9.
We all know that cryptocurrency markets are the most volatile market in the world. Therefore, one of the best ways to make money in the crypto sphere is by trading cryptocurrencies.
Usually referred to as day trading, it can be highly risky and rewarding at the same time. To make life changing money through trading, a trader needs to be competent and use different trading methods.
Margin Trading is the riskiest form of trading. If used correctly, this can become the most profitable method of trading as well.
Just for a head start, margin trading is a form of trading in which you trade with borrowed money. To borrow this money, you need to have some collateral. This method of trading with borrowed money is also known as leverage.
For example, if you have $100 and the exchange allows 10x margin on BTC spot trade. Then in this case you can place an order (both long order or short order) up to worth $1,000. This process of trading more than you can actually afford is known as Margin Trading.
In simple words, it is like borrowing money and investing it in cryptocurrencies.
However, a user must know that in case the market moves in a direction opposite to your position, the exchange can force sale these assets and liquidate your holdings.
Note: Margin trading, in general, is highly risky, crypto margin trading is even riskier. So, it is a strict NO for beginners given veteran traders may also incur huge losses in margin trades.
However, if you are good at regular day trading, you can start trying margins for smaller amounts for crypto trading.
Here is a list of best leverage trading crypto platforms:
Binance is the world’s best cryptocurrency exchange with maximum liquidity, trading volume, and a number of users. Read our full review on Binance here.
The exchange supports margin trading, which a user can understand and execute in a few simple steps. To use the Binance margin trading, you need to complete the identity verification (KYC), and your country should not be in the blacklist of Binance country. Currently, residents of the US cannot use the Margin Trading feature of Binance.
In addition to this, the exchange has a Margin Insurance Fund in order to save its overall liquidity. In case a trader goes bankrupt during margin trading, and his assets are not sufficient to pay off his debts, then the exchange will repay the trader’s debt from this Insurance Fund.
Margin trading can be used for both short as well as the long position. The exchange allows a margin up to 10x on spot trading and up to 125x on derivatives trading.
The interest rate on borrowed amounts changes frequently and can be referred here. Further, you may choose to pay margin trading interest in the form of BNB (Binance in-house token), which will save you a further 5% on interest.
Further, as an alternative to margin trading, Binance offers Leveraged Tokens. These tokens allow traders to put on short or leveraged positions without having to margin trade. For instance, a trader who wants to 3x short Bitcoin can simply buy a 3x short Bitcoin leveraged token on Binance. Leveraged tokens are standard crypto tokens and can be listed on any spot exchange (even those that do not allow margin trading). Further, by buying a leveraged token, an investor is saved from the hassles of maintaining a required margin with the exchange.
Bybit is a specialized platform for derivatives trading. The exchange was established in 2018 and currently has more than 2 million registered users.
Bybit deals in a number of perpetual as well as futures contracts. The platform has launched a pilot for spot trading which should be available to all users in the near future.
They also offer up to $90 as a free joining bonus, which you can use for margin trading. The fee is one of the cheapest, and it is a no KYC exchange. However, in order to use a third-party service such as fiat trading, a user would need to get his KYC done on the platform.
Bybit has a significant market depth and liquidity. Therefore, it is an outstanding platform for margin trading.
For margin trading, Bybit offers margins up to 100x. Further, Bybit has its own insurance funds which can be used to recover losses in case a trader goes bankrupt.
Bybit mobile app is something that you would be using most of the time for trading. The trading engine is blazing fast, and it is the fastest-growing margin trading crypto exchange. You can learn more about Bybit in my detailed review of Bybit.
Bybit is easier to use even for new leverage trading traders. Bybit also offers 24*7 customer support (multi-lingual), which is one of the best. Bybit is based out of Singapore and has offices in multiple countries.
FTX is a cutting-edge crypto exchange with a number of exciting features that was established in May 2019. In general, the FTX exchange provides an immense amount of liquidity to its users with its 3 Tier Liquidity Protocol and FTX Insurance Fund. Read our full review on the FTX Exchange here.
By default, all positions use the same collateral pool. Each subaccount has one central collateral wallet and uses cross margining for the account. Further, a user has an option to use a particular margin in isolation. The exchange provides leverage up to 101x on its products.
Similar to Binance, FTX Exchange also offers a number of Leveraged Tokens. FTX.com does not cater to the residents of US. US residents would need to use FTX.US.
Fees for margin trading
FTX charges a marginal fee that is already included in the lending rates. This means that a borrower will have to pay a slightly higher rate of interest in comparison to that what a lender would receive. The differential will be kept by FTX as the fee for margin trading. In addition to this FTX only charges the typical trading fee.
All borrowing rates are variable and change every hour. You can refer to the borrowing rate here.
Based out of San Francisco, Kraken is one of the largest cryptocurrency exchanges in the USA. It is the second-largest exchange (after Coinbase) in terms of trading volume and number of users that caters to the residents of the US. Read detailed Kraken review to learn more about this popular exchange.
Further, despite catering to US residents, Kraken offers a big variety of crypto tokens. Kraken offers margin on the spot as well as derivatives trading. The leverage allowed on these trades is up to 5x.
Currently, the following tokens are supported for Margin Trading on Kraken:
Kraken has listed eligibility criteria that will determine whether a user is available for Margin Trading. You may refer to the same here. Further, the fee structure for margin trading can be referred here.
The trading fee for margin trading is also very reasonable. You can find more information on this here.
KuCoin is one of those amazing crypto exchanges which offers a wide variety of services and crypto tokens. Most of the low market cap gems can be found on this platform.
Because of an interactive user interface and high platform liquidity, I could not keep this platform away from my best margin trading crypto exchanges list.
KuCoin offers a margin of up to 10x on spot trading and up to 100x on derivatives trading. Further, like Binance and FTX Exchange, Kucoin also offers a number of Leveraged Tokens, which are a better version of margin trading as they do not face a risk of liquidation of assets.
The margin trading interest rate on KuCoin changes frequently and can be referred here.
BitMEX facilitates margin trading for cryptocurrencies and has gained quite a lot of respect in the cryptosphere in a rather short period of time.
The team comprises experienced developers, economists, and high-frequency algorithm traders, which makes it a reliable product. The BitMex is not available for U.S.-based customers, however, you can bypass this using any VPN service.
The registration process on BitMEX is simple as you just need your email to get started, plus, you can also secure your funds using the 2-FA authentication feature that BitMEX provides.
At present, BitMEX offers margin trading for 6 cryptocurrencies out of which Bitcoin margin trades are the most famous. Here is the fee, as well as the leverage schedule for all the cryptocurrencies:
|COINS||LEVERAGE||MAKER FEE||TAKER FEE||SETTLEMENT FEE|
|Bitcoin Cash (BCH)||20x||-0.0500%||0.2500%||0.0000%|
Phemex is one of the newer crypto exchanges on the list. The platform was established in November 2019 in Singapore by an ex- Morgan Stanley employee, Jack.
The exchange has captured a substantial userbase and trading volume within a short span. This is because of the platform’s promotional bonuses and high leverage. Phemex has more than 5 Million users with an average 24-hour trading volume of approx. $8 Billion.
Further, the exchange does not need customer KYC. Users can simply sign up, deposit assets, and start trading on the platform. However, for non-KYC customers, some services, bonuses, and benefits are not available. Please note that Phemex does not cater to US residents.
The exchange offers leverage up to 100x on derivatives trading. Further, the transaction fee for derivatives is 0.075% for Taker and – 0.025% for a Maker. This means that a Maker would receive a trading fee.
You can read more about the Phemex Fees structure here.
Founded in 2013 in London, CEX.io is one of the oldest exchanges in the crypto industry. The exchange is registered with FinCEN (Financial Crimes Enforcement Network). Due to this, it applies appropriate KYC (Know Your Customer) and AML (Anti Money Laundering) procedures.
CEX.io offers more than 100 tokens available in more than 200 token pairs. Further, margin trading is available up to 10 times on these tokens.
The exchange is available in most of the states in the USA. However, margin trading service is not available for US residents.
The exchange charges a trading fee of 0.25% from takers and 0.15% from the makers. This reduces further with an increase in your trading volume.
You can refer to the CEX.io Fees Schedule here.
If you have understood how margin works in trading, then you can do margin trading. Margin trading could be highly profitable if done right, and at the same time, one could lose their capital fast if done without proper risk-management.
Yes, you can buy Bitcoin on margin. All the above leverage exchanges allow you to buy Bitcoin on margin.
So, this was my list of the Best Crypto Margin Trading exchanges out there. You must understand that although all these exchanges are good for trading, they are also a honeypot for hackers to attack.
Further, as these exchanges cater to a huge sum of money, this risk increases manifolds in the case of margin or leveraged trading.
Therefore, even if you simply day trade or margin trade, keeping your money on these exchanges should be done cautiously as it is not safe. The above exchanges provide extra security features such as 2-FA authentication, which you should never forget to use.
I shall reiterate that Margin Trading is a highly risky way of trading, and users should use their discretion.
Now it is time to hear from you: Do you trade cryptocurrencies? Do you indulge in margin trading? Where do you trade or margin trade cryptocurrencies?
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