Crypto Margin trading is booming, and the average daily 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 their portfolios.
Let’s understand how margin trading works for the ones who are new to the concept of margin trading in cryptocurrency and who wants to be margin trader.
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Best Crypto Margin Trading Exchanges To Trade Cryptocurrencies
Here’s a list of the best crypto leverage trading platforms that cryptocurrency margin traders like you can use in 2022:
- Bybit [up to 30,050$ Bonus & 100x Leverage Crypto Exchange]
- StromGain [25$ Bonus & 500x Leverage]
- Phemex [Upto 2200$ Bonus & 20x leverage]
- PrimeXBT [35% Extra Bonus On Deposit, 200x leverage crypto exchange]
- Binance Futures: World’s largest crypto exchange with 20x derivatives
- Deribit: Bitcoin & Ethereum Futures @ 100x leverage
#1 Bybit – 100x Leverage Crypto Exchange
Bybit is the best crypto margin trading platform established in March 2018 and has established itself as the leader in the segment in a short time, especially for retail investor accounts
The exchange has more than 1.6 million registered users and is known for its smart and advanced margin 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 standards.
Bybit margin trading fees are lower than the industry average when trading with margin on the many derivatives contracts they offer.
The exchange does not charge market makers any fees and instead gives them a marker rebate of 0.025% for adding liquidity to their books. Market takers pay 0.075% per transaction for all derivatives contracts.
Bybit maintains a flat-rate fee of 0.1% for the spot market for all trading pairs, and the fee is the same for both market makers and takers.
#2. StromGain- Best Crypto Margin Trading Exchanges To Trade Crypto
StormGain is a London-based cryptocurrency derivatives platform which opened its doors in 2019 and established itself as a leader in the crypto space in a very short time.
This one of the best crypto margin trading exchanges has an average volume of more than $750 million and supports all the major crypto assets like BTC, ETH, USDT, XRP, EOS, DOGE, SOL and many more.
StormGain offers floating leverage of up to 500X on the BTC/USDT pair, 100X leverage on the other USDT trading pairs and up to 50X leverage on the remaining pairs. StormGain offers minimum leverage of 5X on all trading pairs.
The exchange supports all the basic order types and offers a smooth yet robust trading interface with top-notch charting systems.
StormGain’s trading fee structure follows a flat-fee model; there is zero commission for trading, i.e. maker & taker fees are zero however, a profit share of 10% is charged. It also charges a 5% deposit commission when using your debit/credit card, and a 0.1% fee is charged on withdrawals.
#3. Phemex – Best Exchange for Ease of Use
Phemex is a Singapore-based cryptocurrency derivatives exchange that started its operation in November 2019. The company was founded by 8 former Morgan Stanley executives with vast experience in the crypto and financial space.
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 is one of the best crypto margin trading exchanges 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 fulfil the orders instantly.
Phemex fees largely depend on whether you are a standard or premium user. Premium users that pay the monthly membership fees will not pay any transaction fees for spot trading. Standard traders pay 0.1% per transaction, which can be a little expensive for regular and high-volume traders,
For margin trading on their derivatives market, this crypto margin trading exchange employs the maker-taker model like most exchanges. However, they do not have any maker fees and instead give market makers a 0.025 maker rebate for adding liquidity to their books. The exchange then charges market takers 0.075% taker fees.
#4. PrimeXBT- No KYC Margin Trading Exchange
If you’re looking to trade in BTC, ETH, XRP, LTC, and EOS with a maximum leverage of up to 100X, then you should consider PrimeXBT.
PrimeXBT is a Seychelles-based best crypto margin trading exchange founded in 2018 and is one of the fastest-growing Bitcoin margin trading platforms for trading CFDs.
It has revolutionized the crypto derivatives trading space with higher leverage and an advanced trading platform that offers deep liquidity, powerful trading engine, tools & indicators.
The exchange is integrated with 12+ liquidity providers that help 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 margin trades regardless of your trading pairs, which is fairly low. The fees are also even lower for fiat trading pairs as the exchange only charges 0.0001% as commission.
#6. Binance Margin Trading- Crypto Exchange with Highest Liquidity
Launched in early 2020, Binance’s derivatives trading platform is the one of the best crypto margin trading exchange 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 20X on leveraged positions and also supports major fiat currencies.
Binance Futures is a suitable platform for traders and offers a host of advanced trading engine, tools, indicators, and charting systems and supports multiple advanced order types.
This margin 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, for crypto derivatives trading.
The fees are much higher for spot trading as the exchange charges 0.1% for both market takers and makers. However, the exchange gives traders a 25% discount if they hold their BNB token and use it to pay the trading fees.
The daily interest rate on borrowed funds ranges between 0.004% to 0.04%. It is essential to keep the interest rate in mind when trading with margin since you will be opening your position using borrowed funds.
#7. Kraken – Margin Trading Exchange for USA
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 5X.
The exchange is one of the oldest in the crypto markets, 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.
Another element about Kraken that makes it special is that besides being one of the few exchanges licensed to operate in the US market, it is also one of the few that allow US residents to trade with margin.
Although the crypto trading exchange does not offer high leverage for their US traders, the 5X they allow is still enough for most experienced traders who want to amplify their earnings.
Kraken has a tiered fee structure and is on par with several exchanges. The maker and taker fee for the low-volume trader is 0.02% and 0.05%, respectively.
The Kraken margin trading platform also charges margin fees in addition to the trading fees. The opening fee for most base currencies is 0.02%, but for BTC, it is 0.01%. There is also a rollover fee due every hour. The rate is also either 0.02 or 0.01%, depending on the specific base and quote currency.
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 while margin trading.
The exchange supports advanced trading software like FMZ Quant, HAASONLINE, and Actant, which 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 industry standards. The actual fees you pay will depend on the specific contract you are trading, whether you use margin or not.
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 zero maker fees. And BTC/ETH options charge 0.03% of the underlying on both sides.
There are also other fees that you should know before you open a margin trading position, such as the delivery and liquidation fees. For example, Deribit charges a 0.75% liquidation fee for BTC Perpetual & Futures.
#9. BitMEX – Oldest Crypto Margin Trading Exchanges
BitMEX- a centralized cryptocurrency exchange was incorporated in 2014 and has played a vital role in developing the ecosystem of crypto margin trading platforms. It was the first exchange to offer margin trading on cryptocurrencies with leverage as high as 100X.
If you want to trade perpetual contracts with high leverage for different digital assets, BitMEX is one of your best choices out there. Although the 100x leverage is for BTC only, other popular coins like ETH have a maximum leverage of at least 50x, while for others, it can be up to 33.33x, which is one of the highest leverages for altcoins in the market.
The exchange is suitable for professional traders and is known for its highly liquid market. You can also trade traditional futures and Quanto Futures of leading cryptocurrencies, with some high leverages depending on the underlying asset.
BitMEX’s platform interface is solely designed for desktop use and is quite simple, and allows quick and easy management of orders. The platform interface includes a charting system from tradingview, order book, depth chart, and recent trades as a standard offering in their trading strategy.
The exchange has a flat trading fee structure, in which it offers a maker rebate of 0.01% for the majority of leverages perpetual contracts and other derivatives contracts. The exchange then charges a crypto market taker fee of 0.05%.
On borrowed funds, it charges an interest rate of 0.01% for an 8-hour interval, and there is also a funding fee, that will depend on whether the short or long position is paying. The funding fee interval is also 8 hours, and the exchange updates the rates constantly.
BTSE is a UAE-based crypto margin trading exchange and is regulated by the central bank of the 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.
The crypto margin trading platform allows traders to open leveraged positions for both perpetual futures and those that have an expiry period. However, regardless of the contract type, the maximum leverage you can use on the platform is still 100x
BTSE is a well-equipped trading platform that provides flexibility and advanced trading tools and indicators. 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 0.05% for the standard plan on crypto futures trading for the low volume traders with a 30-day trading volume under 2500K, as it uses a tiered structure.
The high-volume traders that transact more than $12.5 billion and hold over 50,000 BTSE leveraged tokens will get a larger market rebate of 0.0200% and only pay 0.0360% as taker fees. The exchange provides a fee structure that shows how much you have to pay depending on your tier level.
BTSE crypto tokens holders are offered a discount on the trading fee based on their quantum of holding, but it is typically around 20%.
- What is Crypto Margin Trading?
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 margin 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 margin trade crypto, 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 needs to succeed in the market. The following are the best margin trading exchanges with leverage.
- Which platform crypto margin trading with futures trading?
The majority of cryptocurrency exchanges with a derivatives market will also allow traders to open leveraged positions as an easy way to amplify their gains. Leveraged trading is also meant to reduce the initial investment that traders need to open positions on these platforms.
That said, the crypto platform that will allow you to margin trade crypto will also depend on where you are. For example, only a few exchanges offer leverage for US traders, given the strict leverage trading regulations there.
One such exchange that allows for bitcoin margin trading services for US residents is Kraken. Also, the maximum leverage is just 5x, which is much lower than what other exchanges offer traders from other countries.
Cryptocurrency traders that are not in the USA or other countries that ban crypto trading or are under financial sanctions like North Korea and Iran have more options for leverage trading.
Companies with a global presence like Binance, Phemex, Bybit, PrimeXBT allow for leverage trading for spot and derivatives markets with a leverage of up to 125x.
However, before settling on any exchange for leverage trade, look at factors like the maximum leverage you can get, the assets you can trade with leverage, and the trading fees to ensure they will work well for you.
- How do you leverage crypto?
Leveraging crypto or trading with margin, as some margin traders best understand it, has been the hype for some years now. However, many crypto traders still do not understand it well or even know how it works and what trading tools to use when you start margin trading.
Crypto margin trading exchanges allow traders to open positions using borrowed funds, and it works for both spot trading and derivatives trading.
How much you can borrow or your leverage size depends on the maximum the exchange allows. Most crypto trading platforms that allow for bitcoin margin trade will give you maximum leverage of anywhere from 5x to 200x.
An excellent way to understand how to leverage crypto is with an example.
Suppose you want to open a leveraged position worth $10,000 in a margin exchange that provides a maximum leverage of 100x like Bybit or Binance. In that case, you will only need to deposit $100 as your initial investment if you are planning to use the maximum leverage.
If you are opening a long position and the price of BTC increases by 10%, your earnings will be $1,000 (10% of $10,000) if you liquidate the position before a price drop. The gains are 100 times more than the $10 you would have earned without leverage (10% of $100).
However, leverage trading also comes with greater risk. From the example above, just a 1% decrease in BTC price is enough to trigger liquidation. The exchange uses liquidation to protect the borrowed funds. And in the event of liquidation, the 1% price drop will lead to an instant loss of your $100 initial investment.
- How long can you hold a margin position?
Several factors will determine how long you can hold a margin position. They include the jurisdiction you are trading from, given the different crypto laws in various countries. Also, the contract type you have and the rules and regulations in your specific exchange determine how long you can hold the position.
That said, the term limit for margin trading when spot trading is 365 days for most crypto exchanges and jurisdictions. Any position that is open for 365 days will typically be liquidated automatically. Therefore, it is essential to check with your specific exchange to be sure how long you can maintain the positions.
Some derivatives contracts that allow you to open a position with a margin, such as futures, have a specific settlement.
For example, if you are opening a futures contract with a quarterly settlement period, you have to close the position within the specified three months. Therefore, you can only maintain such a leverage position for three months.
Most top-tier exchanges will provide clear guidelines on how long you can hold all the leveraged positions they support. Some exchanges will allow you to hold the leveraged position for 30 or 60 days, while for others, you can maintain it much longer than this.
That said, crypto traders need to remember that leveraged trading is not a long-term investment. Because of the high management fees in most exchanges and volatile market decay, you should only trade crypto with margin as a short-term investment.
- How much can you lose from margin trading?
Margin trading cryptocurrency will amplify your earnings, but it is also important to remember that it will also increase the risk and amplify your potential losses. However, the good news is that the best margin trading platforms have put mechanisms in place to ensure you never lose more than you invest.
For example, if you open a position with a 100x margin in a trading exchange that supports this, your potential earnings will be multiplied by 100. Therefore, if you invest $100, a 10% earning translates to $100 (10% of $10,000, which is the full position).
Ideally, your potential loss should also be 100 times, meaning you will lose up to $10,000. However, cryptocurrency exchanges have set up liquidation mechanisms to ensure that you never lose more than you invest.
When the market moves in a direction that does not favour your position, the liquidation systems will take over and close down your position once it hits the maintenance margin level. This mechanism ensures that the borrowed funds remain intact and you only lose your actual investment.
All this means that if you invest $100, the maximum you can lose from the leveraged position is $100, regardless of the leverage you use.
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 the necessary tools and indicators to start trading.
I hope this guide helps you in selecting the right crypto margin trading platform but don’t consider it as investment advice.
And, while margin trading bitcoin or other cryptos, follow the necessary risk management procedures and trade as per your risk limit. It will help you in making gains and reducing loss percentage.