The whole crypto space is going crazy about crypto margin trading today. But traders in countries like the USA are unable to taste its potential and are behind other ways to margin trade.
But don’t worry, we are here to solve this problem for good, with the list of 5 best crypto margin exchanges that you can use in the US to skyrocket your profits, and that too with funds that are not even yours!!!
So, let us get straight into the list.
Bitcoin & Crypto Margin Trading USA
As experienced crypto traders ourselves, we have shortlisted the best cryptocurrency exchanges available to start trading on. So you don’t have to go through all the hassle.
In this list we have sorted exchanges with low margin and high leverage operating in the USA, they are:
- FTX US Derivatives
- Delta Exchange
Now, let us dive deeper into each of these exchanges.
1. Kraken- Free Demo Account, without KYC
It’s a US-based crypto exchange, founded in 2011.
Kraken allows up to 5x leverage, though it sounds less, here you can trade in a variety of altcoins. BTC, BCH, ETH, ETC, REP, XRP, and XMR, trading against BTC, USD, ETH and EUR.
It allows both long/short positions and charges between 0.01% to 0.02% for any of the base and quote currency trading pairs.
It also provides you with a demo account before investing your real funds. There are different KYC levels required for each of its starter, express, intermediate and pro version.
Complete KYC is mandatory for the Pro version only. And each verification level unlocks different features of trading.
Kraken has excellent customer service support available 24×7 who are quite responsive. So, US traders feel free to margin trade on Kraken as here you can liquidate your funds anytime.
2. Poloniex- 100x Leverage, $10,000 daily transactions, no KYC
Second, on the list is Poloniex, launched in October 2013 in the USA. It was later sold to Circle Internet Financial Limited, a mobile payment platform in 2018.
Poloniex allows up to 20x leverage, for derivatives trading though it has a very low volume, you can trade for 10+ cryptocurrency pairs but only in BTC.
You can margin trade on any of the long/short positions as per your speculation.
The margin interest fees are charged when the margin position is closed. The standard trading fee regardless of your 30-day trading volume is based on the maker/taker module, 0.01%/0.02%.
By setting up an account in Poloniex you get 10,000 USDT as demo money. Verification here is on a 2-level basis, level 1 allows limited access and level 2 unlocks all the features. You can withdraw up to around $10,000 daily without KYC.
It has a 24×7 enabled chat box feature, which has got reputable customer feedback. Users can also liquidate their funds anytime.
3. FTX US Derivatives- Upto 60%, lowered fees
Next up is FTX, a Bahamian crypto trading platform, incorporated in Antigua and Barbuda and founded in the year 2019. This might be a very recently established exchange but it has been in the top trading exchanges with exponentially low fees.
Following the maker/taker fee module, the maker varying from 0 to 0.020% and the taker from 0.040% to 0.070%, FTX allows up to 20x leverage.
The fees here can be reduced (up to 60%) depending on the FTT tokens you hold in the exchange.
Sounds less, but FTX allows 150+ perpetual and quarterly futures. It includes leveraged tokens, BTC options, MOVE contracts, and leveraged tokens to help you speculate better.
It also allows trading in both long and short positions.
KYC Verification on FTX is on a tiered structure, in which Tier 1 unlocks a daily $2000 limit, with no crypto deposit limit but you cannot withdraw or deposit any fiat currencies. Whereas, Tier 2 unlocks all the features.
FTX has almost all order types, with an efficient and secure trading engine and impressive customer service.
4. Delta Exchange- Upto 200x leverage
Next on the list, is Delta Exchange which was founded by Pankaj Balani, Jitender Tokas, and Saurabh Goyal in the year 2018. It is backed by Aave, Kyber Network, SinoGlobal Capital, QCP, LuneX, Gumi Cryptos, BR Capital, CoinFund and more.
Delta Exchange allows up to 100x and even 200x leverage for certain trading pairs and both the positions.
The unverified verification allows up to a $10,000 withdrawal limit and Verified KYC unlocks all the features.
The trading fee is based on the Maker/taker fee module, varying between 0.1% to 0.05% for each of them. The liquidation value varies from 0.2 and 0.5.
You can turn on the limit order feature to buy coins at a certain price that you decide to buy them on.
Whereas, the stop loss option allows you to avoid hitting any unwanted liquidation price.
Delta Exchange also has the chat box feature which comes in handy with, cutting-edge customer support.
5. Eqonex Up to 125x Leverage
Ending the list is Eqonex, founded in the year 2019 in Singapore. It is a Nasdaq-listed crypto exchange, under the parent company Diginex which was the first trading company listed on Nasdaq.
Eqonex allows maximum leverage of 125x supporting various altcoin trading. With a mere, $150 you can begin trading and there are no card deposit fees in Eqonex. In this platform, KYC is a must to margin trade.
Eqonex trading fee system is also based on the maker/taker, where maker fees vary between 0.010% to 0.080% and taker fees between 0.020% to 0.090%. This exchange also comes with a chat box with a 24×7 available team.
Now, that you know about the crypto margin platforms available for you in the USA. Let us now understand what the regulations are for Crypto margin trading in the USA currently.
Crypto Margin Trading Regulation in the USA
In the financial crisis of 2007 many countries banned short-term stock trading because of their unreliable profit and loss magnification.
Margin trading can get you significant growth in a very short time, but can also put you into loss if mishandled. And hence, crypto margin trading (also known as Bitcoin margin trading by many) fell victim to it.
In the USA, laws on margin trading are very rigid and cause real-time problems for traders. (CTFC) Certificate in Trade Finance Compliance regulates margin trading and crypto exchanges strictly.
Exchanges have to get certain permissions to serve leveraged trading. Thus, most of them switch to easier operable countries and are so unavailable in the USA. Brokers Licensed in the UK by FCA are only allowed to offer US derivatives to trade.
US residents can make regular investments in stocks and trade cryptocurrencies. But cannot take part in pure price bets and high leveraged trading.
But the question now arises then, What is the solution for this ever-existing problem? Is there some exchange that can simplify the space of margin trading in the USA?
How To Margin Trade Crypto In The US?
Some of you may have heard of traders using VPNs in restricted countries like the USA. Though VPNs sound very easy to work with, a few extra bucks to download and register, and boom, you are margin trading.
But using a VPN will get you in a lot of trouble afterward. For starters, some unauthorized VPNs disclose all your account details. And most of the free VPNs are built for this sole purpose only.
Secondly, VPNs are illegal to use, if caught, can result in the freezing of your trading wallet.
Thirdly, when your details are all out there, your wallet or account can be easily hacked. And that is why VPNs do more harm than good. We at MoneyMongers say a no-no to them.
Now, the safer, legal, and most legitimate way to margin trade is to trade through the exchanges we went through, in the beginning. These cryptocurrency exchanges have appropriate licenses to offer crypto trade with leveraged trading.
Kraken for example facilitates margin trading to a great extent. With a designated contract between the trader and Kraken. It enables margin trading flawlessly in the US without involving any third-party systems.
Let us know how it does this.
Can You Margin Trade on Kraken in the USA?
Kraken is one of my favorite exchanges, I have been through which aids margin trading in the USA like anything.
Particularly, it provides its margin and spot trading services to its US clients. Who meet a specific requirement, called Eligible Contract Participant (ECP). It is a self-certification provided to US clients, which is recommended under US laws and in turn, allows Kraken to margin trade.
How Do Crypto Margin Trading Platforms Work?
Crypto margin trading work by serving as a medium to trade cryptocurrencies at leveraged positions in which the exchange lends money to the users to trade.
You can buy X number of crypto coins with your limited capital, and then, maximize those X number of coins using borrowed funds, this is means to leverage.
For example, suppose you have $3,000 and you want to buy ETH worth $60,000 from them, but with your $3,000 you can buy only 1 ETH. So now you decide to switch over to Margin trading. Where in, through leveraging say 20 times you have successfully converted that $3,000 into $60,000 worth of ETH.
Now when the price of 1 ETH increases by let’s say $20, instead of gaining only $20 you now earn a profit of $400, that’s 20 times more profit. Yes, of course, there are fees associated with it. But you get the math. A significant benefit for funds that weren’t even yours is now in your account. Amazing right?
Thus, through margin trading, you can trade crypto of far greater value than you can afford and acquire more trading profits. But as good as it sounds you should understand why such an amazing trading method is banned in countries like the USA.
As soon as you can get rich with margin trading you can end up in bankruptcy too. Because as it magnifies your profits, if things go south, it will also multiply the debt. The exchange will then sell your position when it feels there is a chance of risk.
With something called ‘Liquidation Price’. Let us understand what it is.
What is a Liquidation price?
The margin trade cryptocurrency platforms have many advanced trading features, under the supervision of the (NFA) National futures association. One of which is the liquidation value or liquidation price.
When the value of the underlying asset keeps on falling, the exchange automatically closes further margin trading of your account and sells your position to recover the funds.
That particular price at which your asset sells is called the liquidation price.
For example when you take a loan from the bank to buy a car. But when you are unable to pay the installments the bank seizes your car until you pay it and if you are unable to pay in the span of the notice given to you. They sell off your car to recover that loss.
Similarly, in margin trading, the exchange now sells your margin thereby closing positions at whatever price is available for your underlying asset in the market. Hence, selling such positions helps the exchange to recover from a possible loss.
Now the question arises apart from recovery how do these exchanges make profits and earn? Let us find out.
How Do Margin Trading Exchanges Earn?
Because the trading fees are applied to the total amount or the net profit. When you made a profit of 20 times, the initial margin, the cryptocurrency brokers charge a fee for that 20 times increased profits.
Therefore, when you make a profit 20 times higher the exchange also charges fees 20 times higher. A win-win for everyone right, after all, it was the exchange that lent you their funds to make that 20 times higher profit.
Now that we have gone through the working of margin trading, let us quickly understand the basics to start trading on such exchanges.
Getting Started With Margin Crypto Trading
There are many Crypto margin trading platforms available that enable cryptocurrency margin trading. As soon as you open any of these exchange pages or mobile applications you first have to create an account. And then you can transfer funds into your wallet to begin trading.
Of course, some exchanges also give you an option of a demo account or demo money in your wallet.
- KYC & Fees
After creating an account, some platforms mandate KYC. Similar to the opening of a bank account, these crypto trading platforms also ask for some basic details for signing up.
There are exchanges that give an option of trading without KYC also, but then there is a limit set for trading and access.
These exchanges also have a varied fee structure for trading, but mostly lie more or less around the same variables.
- Enabling Margin trading
Some of these platforms are overall crypto trading platforms by default, meaning that together with margin trading they offer other services of crypto trading also.
Therefore, to enable the margin trading account you have to manually enable it from the settings options in some exchanges.
- Multicoin wallets
These exchanges also give you an option of two wallets, one being your default wallet, linked with your default account (Holding wallet) and the other linked to your margin account (Futures Wallet). Other than Bitcoin margin trading you can even opt for altcoin trading, enabling many other coins to trade-in.
- Diversified Leverage options
Exchanges vary between the leverages they offer from mere 5 times to 200 times depending on the application’s terms.
Some platforms even allow you to experiment on their demo accounts where you can learn everything about the basics of spot trading, futures trading, margin leverage, CFD trading, risk management, and other trading skills.
To save money and maximize profits from trading cryptocurrencies these exchanges also offer two very useful tools for margin trading, classified into something called ‘Going Long’ or ‘Going Short’.
What Is Going Long & Short?
As you deposit funds into your default wallet and transfer them to your margin trading/bitcoin margin trading account wallet, you can opt to go Long or short positions.
In the margin trading framework “Short” means when you speculate that the price of your coins will drop soon, you start selling them. On the other hand, when you forecast that the price of the coin is about to go up you start buying coins, which come under being “long”.
But the reason they are called long and short here in margin trading is that you don’t own what you buy here because it is not your funds that you are using but have borrowed from the exchange.
That’s all you need to understand to begin margin trading.
Margin trading is a very beneficial tool for traders who have limited capital. Through it, one can easily begin by borrowing funds from exchanges and multiplying their profits.
Though these exchanges are facing some issues in operating on a full and free scale at current times. But seeing its growth potential, governments may try to aid its functioning in the future.
Through this article, we got to know about major exchanges available in the crypto market for margin traders in the USA. And about the working and different features of these exchanges.
US traders can participate in margin trading but being careful and proper market research is very important for all the users.
So, take risks and keep hustling!!!
- 1 Bitcoin & Crypto Margin Trading USA
- 1.1 1. Kraken- Free Demo Account, without KYC
- 1.2 2. Poloniex- 100x Leverage, $10,000 daily transactions, no KYC
- 1.3 3. FTX US Derivatives- Upto 60%, lowered fees
- 1.4 4. Delta Exchange- Upto 200x leverage
- 1.5 5. Eqonex Up to 125x Leverage
- 1.6 Crypto Margin Trading Regulation in the USA
- 1.7 How To Margin Trade Crypto In The US?
- 1.8 Can You Margin Trade on Kraken in the USA?
- 1.9 How Do Crypto Margin Trading Platforms Work?
- 1.10 What is a Liquidation price?
- 1.11 How Do Margin Trading Exchanges Earn?
- 1.12 Getting Started With Margin Crypto Trading
- 1.13 What Is Going Long & Short?