Margin trading in cryptocurrencies is booming, and the average daily trading volume for crypto derivatives has crossed 50% of the total cryptocurrency market. And, is steadily growing—a positive sign for the market.
If you don’t know, derivatives are an important part of any monetary system. It helps investors to hedge their risks against volatility and diversify his portfolio.
Let’s understand how it works for the ones who are new to the concept of margin trading in cryptocurrency.
What is Margin & Leverage Trading In Crypto?
Margin trading is also known as leveraged trading. It is a process in which traders borrow capital from exchanges against their holding to increase leverage and trade a larger amount of a specific asset.
For example, if you hold 1 BTC, you can borrow 5 BTC from the exchange and trade as you are holding 6 BTC, thus increasing profit potential.
And, if you’re on the wrong side of the trade, you can lose heavily. At the end of the day, you need to pay back the exchange of their money with interest. It is similar to playing slot machines in Casinos.
Therefore, only professional traders should dabble with crypto derivatives trading.
In margin trading, crypto exchanges also matter. You need to select the right kind of exchange that suits your need to succeed in the market. Following are the best cryptocurrency trading platform with leverage.
9 Best Crypto Exchanges For Margin Trading
- ByBit: $90 Deposit Bonus & 100X leverage. [Recommended]
- PrimeXBT – 35% Extra Bonus On Deposit, 100X leverage on all coins
- FTX: Many exotic cryptocoins & tokens here for 50x levergae
- Phemex: Up & coming crypto futures and derivatives platform at 20x leverage
- Binance Futures: World’s largest crypto exchange with 100x derivatives
- Deribit: Bitcoin & Ethereum Futures @ 100x leverage
Bybit is a crypto-derivative-only trading platform established in March 2018 and has established itself as the leader in the segment in a short time.
The exchange has more than 1.6 million registered users and is known for its smart and advanced trading platform. It offers to trade in inverse perpetual contracts (BTCUSD, ETHUSD, XRPUSD, EOSUSD), linear perpetual contracts (BTCUSDT, ETHUSDT, BCHLINK, LINKUSDT, LTCUSDT, XTZUSDT, ADAUSDT, DOTUSDT, UNIUSDT), and inverse futures contracts (BTCUSD quarterly).
You get to trade with a maximum leverage of 100X on BTCUSD and BTCUSDT pairs and up to 50X leverage on the rest of the trading pair.
In our in-depth Bybit review we found out the trading fee on the platform is competitive and as per industry standard. It offers a maker rebate of 0.075% and charges a taker fee of 0.025%.
If you’re looking to trade in BTC, ETH, XRP, LTC, and EOS with the maximum leverage of up to 100X, then you should consider PrimeXBT.
PrimeXBT is a Seychelles-based exchange founded in 2018 and is one of the fastest-growing Bitcoin margin trading platforms. It has revolutionized the crypto derivatives trading space with higher leverage and an advanced trading platform that offers deep liquidity and powerful tools and indicators.
The exchange is integrated to 12+ liquidity providers that help to fill orders instantly and can execute over 12,000 TPS with an average order execution speed of less than 7.12 ms. And, through PrimeXBT’s Covesting platform, you can copy leading traders and execute their trading strategies.
Regarding trading fees, it charges a commission of 0.05% per trade on all types of trades.
FTX is one of the top-5 crypto derivatives trading platforms by volume and is incubated by Alameda Research (a top global liquidity provider) and was started in November 2019.
The exchange is also backed by many leading cryptocurrency firms like Binance, Bitfinex, FBG Capital, Circle, etc.
It offers to trade in over 150 perpetual and quarterly futures, take leveraged positions in ERC-20 tokens, BTC options, and MOVE contracts. FTX offers maximum leverage of up to 101X and gives you the flexibility to adjust the default leverage rate on your account based on trading preferences.
The FTX exchange follows a tiered fee structure for all futures contracts based on 30-day trading volume. For the initial level, with the trading volume less than $2,000,000 charges a maker fee of 0.02% and a taker fee of 0.07%. FTT token holders are offered a discount of up to 60% on the trading fees.
Phemex is a Singapore-based crypto derivatives trading exchange that started its operation in November 2019. 8 former Morgan Stanley executives lead the exchange.
The exchange is a fully registered Money Services Business (MSB) with the Financial Crimes Enforcement Network Department that ensures the safety of your funds on the platform.
The exchange has successfully registered over a million users quickly and nets an average daily trading volume of $1.1 bn. Phemex offers margin trading in 15 leading cryptocurrencies with up to 100X leverage.
Phemex exchange platform is designed for high-frequency trading, one of the key requirements in crypto derivatives trading. It processes over 300K TPS with an order response time of fewer than 30 milliseconds. And, it also connected to over 30 liquidity providers, thus helping to fulfill the orders instantly.
Launched in early 2020, Binance Futures is the leading player in the segment and is the most liquid market among all exchanges. It nets an average daily trading volume of over $60 billion, the highest in the industry.
The exchange offers a wide range of trading options in the market, including USDT-M Futures (USDT margined perpetual futures), COIN-M Futures (Token margined with or without expiry dates), BTC Options, and Leveraged Tokens. On futures contracts, the exchange offers a leverage of up to 125X.
Binance Futures is a suitable platform for professional traders and offers a host of advanced trading tools, indicators, charting systems and supports multiple advanced order types.
The exchange has a tiered fee structure based on 30-day trading volume, with the maker and taker fees starting from 0.02% and 0.04%, respectively. And, the daily interest rate on borrowed funds ranges between 0.004% to 0.04%.
Kraken Futures platform is suitable for both private and institutional-class traders worldwide. The platform allows you to go long and short on five different cryptocurrencies (BTC, ETH, LTC, BCH, and XRP) with a maximum leverage of up to 50X.
The exchange is one of the oldest in the market, founded in 2011 and launched in 2013, and is trusted by millions of users. It has a simple and intuitive interface with customizable workspaces and simplified order forms.
Regarding trading fees, it has a tiered fee structure and is on par with several exchanges. The maker and taker fee for the initial level is 0.02% and 0.05%. The margin fees on leading cryptocurrencies are 0.01%, with four hours rollover.
Deribit is an institutional-grade cryptocurrency derivative platform founded in 2016 and offers perpetual, futures, and options trading in BTC and ETH. It offers maximum leverage of 100X on Bitcoin futures and up to 10X on BTC options.
The exchange supports advanced trading software like FMZ Quant, HAASONLINE, and Actant, which professional traders prefer. Apart from this, the exchange comes with real-time auditing, liquidation, and risk management functions.
Deribit’s trading fees are competitive and are on par with the industry standards. The BTC Weekly Futures offers a maker rebate of 0.01% and charges taker fees of 0.05%. On BTC and ETH perpetual, it only charges a taker fee of 0.05%. And BTC/ETH options charges 0.03% of the underlying on both sides.
BitMEX was incorporated in 2014 and has played a key role in developing the crypto derivatives market. It was the first exchange to offer margin trading on cryptocurrencies with leverage as high as up to 100X.
The exchange is suitable for professional traders and is known for its highly liquid market. You trade perpetual contracts, traditional futures, and Quanto Futures of leading cryptocurrencies.
BitMEX’s platform interface is solely designed for desktop use and is quite simple, and allows quick and easy management of orders. As a standard offering, the platform interface includes a charting system from tradingview, order book, depth chart, and recent trades.
The exchange has a flat trading fee structure, in which it offers a maker rebate of 0.025% and charges a taker fee of 0.075%. On borrowed funds, it charges an interest rate of 0.01% for an 8-hour interval.
BTSE is a UAE-based exchange and is regulated by the central bank of UAE. The exchange platform was launched in 2018 and has already gained a large user base.
It is a multi-currency exchange that allows trading in currency, spot, and futures. The futures segment offers to trade in Bitcoin perpetual and Ethereum perpetual and offers up to 100X leverage.
BTSE is a well-equipped trading platform that provides a lot of flexibility and advanced trading tools and indicator. The exchange can process over a million transactions per second; 99.99% of the funds are stored in cold storage, fully self-hosted infrastructure, and near-zero downtime.
The exchange offers a maker rebate of 0.01% and charges a maker fee of 0.04% for the standard plan on crypto futures trading. BTSE token holders are offered a discount on the trading fee based on their quantum of holding.
You can find many crypto exchanges that offer cryptocurrency margin trading. Still, I found the exchanges discussed above are the best crypto leverage trading platform that offers value to users and is equipped with necessary tools and indicators.
I hope this guide helps you in selecting the right crypto margin trading platform. And, while margin trading Bitcoins or other cryptos, follow the necessary risk management procedures and trade as per your risk limit. It will help you in making gains and reduce loss percentage.