That said, crypto trading with leverage is far from a “get rich quick” scheme. It takes a lot of calculation, risk, and market experience to get it right – and even then, success is not always guaranteed. Leverage can multiply or decrease the outcome of a trade, so balance is key here – and mastering it isn’t something many traders can do in a day. Find out what is leverage trading crypto like – from how it’s used in the markets to managing the risks. Leverage trading allows traders to start with smaller initial capital but still be exposed to higher profits.

• Keep in mind that the higher the leverage you use means you have a lower margin of error to reach your liquidation point.
• Depending on your coin pairing, Binance leverages differ and can be up to 20x.
• However, traders must keep enough funds in their accounts as collateral for the lending platform.
• In addition to margin deposits, you need to be aware of the broker’s margin threshold, also known as maintenance margin, which is designed to keep your positions from being liquidated.

It is not an offer to buy or sell any security, product, service or investment. Besides the USA, Kraken is available in more than 170 countries worldwide. Even though it is based in the U.S., New York, and Washington residents are excluded from trading on this platform.

MEXC: Rising Star with High Leverage and Robust Features

So, before you jump in, you might also familiarize yourself with our selection of the top five best trading strategies. MEXC can be considered a worthwhile choice and alternative to the big-name margin platforms. However, MEXC is not available to use in the USA and the customer feedback on their experiences is average. Overall, OKX is a strong contender when looking for the best place to trade crypto with margin. While it lacks in the number of margin pairs to trade, it makes up for it in its excellent trading terminal that can be accessed on a mobile device for 24/7 trading.

• If the margin falls below the maintenance threshold with price fluctuations, you will have to deposit extra funds into your account.
• PrimeXBT exchange has scintillated the leveraged trading for millions of crypto enthusiasts and is one of the crypto exchanges that allow shorting cryptocurrencies on a large amount of leverage.
• We will use another leverage trading crypto example to demonstrate this point.
• Customers that choose to trade with leverage can set up a stop loss to reduce the risk of liquidating assets.

It is equally important to know the liquidation price of your leveraged position. Although exchanges will always give you the liquidation price, it is good to know how it is calculated. Now that you understand why experienced traders may want to use leverage in crypto, let’s briefly see how you can use leverage in crypto to master this topic better. For example, if you want to trade $500 in BTC with 2x leverage, you must deposit minimum collateral of $250 in your account.

Kraken: Trustworthy Leverage Trading with Wide Range of Options

The flat rate of 0.5% is also quite high when compared to Bybit and Binance Futures. The benefit of using Huobi for crypto margin trading is the ability to access other features, products, and services on the same exchange such as staking and earning interest on edge trading platform cryptocurrencies. Funds can be seamlessly transferred between wallets to take advantage of other services in between margin trading. Leverage trading in crypto starts with funding your trading account, and the initial capital you provide is called collateral.

• The exchange focuses on providing a simple and easy-to-use trading service for digital assets.
• Its advanced charts, real-time data, and detailed market analytics help traders make informed decisions.
• The platform allows multiple charts to display one asset across multiple time frames, or keep an eye on a few different assets at the same time.
• The platform offers up to 100x leverage on some assets and is known for its user-friendly interface and low fees.
• Bybit is known for its user-friendly interface and fast trading speeds, making it a popular choice among traders.

In this article, we compare and review the best exchanges to margin trade crypto. Leverage uses borrowed capital to trade cryptocurrencies, increasing your buying power and allowing you to trade with more capital than you might have. Bybit is a crypto derivatives-only exchange that offers some of the most innovative charting features and is a top 5 crypto derivatives exchange by volume. The platform supports trading inverse perpetual and Tether (USDT) perpetual futures contracts. Bybit’s ability to handle more trades per second than most legacy exchanges has quickly made it one of the most popular up-and-coming trading platforms. Well, it doesn’t differ much from other platforms that provide this service outside of the US.

Bitfinex – Long-Standing Margin Exchange For Crypto

Overall, Kraken is a reputable option for qualified margin traders, however, margin and futures markets are restricted to US-qualified traders only which is a downside for international users. While the fees are competitive, there are better exchanges that have a larger selection of trading pairs. In total, there are currently 36 cryptocurrencies that can be traded with margin which include Bitcoin, Ethereum, Cardano, Solana, Compound and many others. This is a reasonable selection of coins that comprises the most popular assets by market capitalization and emerging DeFi tokens.

The platform uses a combination of cold storage, two-factor authentication, and encryption technology to protect users’ funds and personal data. BitMEX operates a maker-taker fee structure, which can work out to be relatively cost-effective for high-volume traders. While this is lower – than some newer platforms, it’s worth noting that this level of leverage still carries substantial risk and should be approached with caution. BitMEX offers up to 100x leverage on Bitcoin, and up to 50x on other selected cryptocurrencies like Ethereum, Litecoin, and Ripple.

How Do You Manage Risks With Leveraged Trading?

It would be best to never trade with more than you can afford to lose and always take profits. Leverage trading is ​​a double-edged sword that can exponentially amplify both your gains and losses. It involves a high level of risk, especially in the volatile cryptocurrency market. As such, Binance encourages users to trade responsibly by taking accountability for their actions. Another reason traders use leverage is to enhance the liquidity of their capital. For instance, instead of holding a 2x leveraged position on a single exchange, they could use 4x leverage to maintain the same position size with lower collateral.

• Nonetheless, the crypto market is highly volatile, and high leverage can cause liquidation risks.
• As I’ve emphasized many times throughout this article, leverage trading crypto is a high-risk, high-reward endeavor.
• Customer support is available 24/7 via live chat and email, ensuring traders can get assistance whenever required.

Setting fixed stop-loss lets you know the amount you risk losing if the trade fails. Ideally, you should set stops at a point where the trading position becomes invalidated. By using leveraged products, you can profit from both rising and falling markets, that is the ability known as shorting. When trading with leverage, you can speculate product price movements which then inform your decision to either buy or sell. If you buy an asset because you believe the price would rise, this is termed ‘going long’ and when you sell it is called ‘going short’.

Factors to Consider When Choosing a Leverage Trading Crypto Broker

On the other hand, leverage trading often involves the trading of perpetual contracts that does not use an interest rate but rather a funding rate. With a 24h derivatives trading volume of around $800 million, Deribit is one of the most popular cryptocurrency exchanges for leveraged trading. One of the oldest and most respected cryptocurrency exchanges, Kraken, founded in 2011, continues to hold its position as a top choice for margin trading crypto in 2023. BaseFEX offers a competitive leverage ratio of up to 100x on Bitcoin and up to 20x on other supported cryptocurrencies. While the leverage offered is not the highest in the market, it strikes a good balance between risk and potential return for traders.

However, trading with leverage in this way is less accessible than regular spot trading, since it’s more regulated and is seen as riskier. Finally, since leverage trading is a risky business, I’ll offer you some tips and tricks that may help you keep your assets safe even when a trade goes south. Specifically, we’ll focus on how the process works on Binance and Kraken exchanges, especially when it comes to crypto leverage trading USA clients. For starters, we’ll define what crypto trading with leverage is and how it relates to the concept of margin trading. Then we’ll take a look at how leverage can be used in spot and derivatives markets. If you’d like some background knowledge before you take a deep dive into leverage, you can find our guides on how spot trading works and what margin trading is.

Uneducated wagers are the ones at risk

Margin trading permits you to borrow money and trade more significant amounts than you would be able to if you only use your funds. On the contrary, margin trading also increases the risk of losing all of your money or being liquidated. As mentioned, traders use leverage to increase their position size and potential profits. But as illustrated by the examples above, leverage trading could also lead to significantly greater losses.

• Established in 2018, Bybit is a cryptocurrency derivatives exchange that caters to both individual retail clients and professional traders.
• So if you have a 5% increase, the result will be multiplied by ten (the leverage), which means you will have 50% profit instead of the 5% you had without leverage.
• The crypto margin trading fees on Huobi leveraged pairs are based on a maker-and-taker model that starts from 0.2% and 0.2% respectively.
• One of Bybit’s standout features is its user-friendly interface, which is intuitive for beginners, yet sophisticated enough for seasoned traders.

Gaining experience in predicting how much an asset is likely to move up or down and practicing using leverage increases your chances of successful trading. Always trade with caution and evaluate the risks before engaging in leverage trading. You should never trade funds you cannot afford to lose, especially when using leverage. Leverage allows you to get started on trading with a lower initial investment and the potential for higher profits. Still, leverage combined with market volatility could cause rapid liquidation, especially if you’re using 100x leverage. It also offers tools like an anti-addiction notice and the cooling-off period function to help users exercise control over their trades.

What Is Leverage in Cryptocurrency?

Centralized cryptocurrency exchanges that offer crypto trading with leverage, such as Binance, often offer leveraged tokens as a simplified trading method. Having these tokens lets you gain leveraged exposure to assets that you otherwise wouldn’t be able to trade. The availability of trading – pairs that use leveraged tokens will also depend on your trading platform of choice. Cryptocurrency margin trading refers to the practise of borrowing funds from a broker or exchange. The borrowed money is used as collateral to increase the capital amount to trade a larger position size.

• However, trading in American assets and their derivatives with leverage on trading platforms is permitted as long as American citizens do not do so.
• Binance has a mobile trading app for iOS and Android devices that is highly intuitive, easy to use, runs smoothly, and performs all the basic functions expected of a crypto margin trading app.
• So simple maths, you are now left with a profit of $5000, which you have earned by leveraged trading on the initial $1,000 you had.
• If the price of the asset that you are leveraged trading goes in the opposite direction, your margin will start to drop.
• It takes a lot of calculation, risk, and market experience to get it right – and even then, success is not always guaranteed.

Investors can also take advantage of the platform’s copy trading feature to potentially make more profit from futures. KuCoin offers a wide range of cryptocurrencies for leverage trading, with up to 100x leverage on some assets. The platform also provides a range of advanced trading features, including stop-loss and take-profit orders, margin trading, and futures trading. In terms of security, KuCoin uses top-of-the-line security measures to ensure the safety of its users’ assets, including SSL encryption, multi-signature wallets, and 24/7 monitoring. OKEx offers a wide range of cryptocurrencies for leverage trading, with up to 100x leverage on some assets. In terms of security, OKEx uses top-of-the-line security measures to ensure the safety of its users’ assets, including SSL encryption, multi-signature wallets, and 24/7 monitoring.

Example of Bitcoin Trading With Leverage

Essentially, leverage enables you to trade at a bigger capacity with minimal resources, maximizing returns. Yes, leveraged trading carries substantial risk, especially for new traders. If used wisely, leverage can be a useful tool to increase your profits. Cryptocurrency markets themselves are risky, but margin trading on crypto exchanges is even more dangerous. The platform provides leverage up to 10x for various cryptocurrencies, including Bitcoin, Ethereum, and others. Although the maximum leverage may not be as high as some other platforms, it can be ideal for traders seeking a balance between potential returns and risk.

Similar to Bybit, and Binance Futures, this platform has perpetual futures contracts without expiry dates. The benefit of the Futures exchange is there are two modes available for new traders and experts. You can avoid situations in which you could lose a significant percentage of your trading money by thoroughly planning out your position sizing. If you lose a significant percentage of your trading capital in one unsuccessful leveraged trade, you could be less motivated to practice discipline when managing the remaining funds.