From 2019, the popularity of cryptocurrency trading with leverage has considerably increased in the cryptosphere.
This is due to the growth of many crypto leverage trading platforms mushrooming all over the world with attractive leverage options.
Access to leverage is an attractive option for many traders because the abnormal volatility of crypto markets enable day traders to earn higher returns within a short time if they are disciplined enough.
This isn’t possible in spot trading of crypto because leverage is absent there. But now there are many options for the day traders to access leverage for their cryptocurrency traders.
How & Where To Margin Trade Bitcoin Like Crypto With Leverage
Acknowledging the risk and keeping it aside for a moment, crypto’s volatility is being used by many traders for their advantage for higher profits in a short period, with only a fraction of funds on the line. They are doing this on these exchanges, which I am sharing with you today.
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Launched in 2018, PrimeXBT has thrashed many established players in the game of leveraged trading of cryptocurrencies. Using PrimeXBT, you can trade cryptocurrencies like Bitcoin for high leverage up to 100x.
As of now, PrimeXBT is supporting BTC, ETH, LTC, XRP, and EOS like cryptocurrencies for leverage trading. But there is more to this, PrimeXBT is also allowing its users to leverage trade stock indices, commodities, and forex through its single-use platform.
There is no headache of KYC on PrimeXBT, and using your email, you can get started in 30 seconds to leverage trade your cryptos.
Another USP of PrimeXBT’s crypto leverage trading is that it provides 100x leverage for all the assets listed on its platform, which is rare to be found in the cryptosphere.
So if you want more leverage with the lowest trading fees and customizable UI for all types of traders, PrimeXBT is the way to go !!
ByBit has quickly become a known name in the crypto traders community who like to trade crypto contracts on high leverage. ByBit might look like a gaming website first, but it is not.
Launched in 2018, March and based out of Singapore, ByBit is a platform to trade Bitcoin-like crypto with leverage of up to 100x, meaning, if you have 1 BTC, you can place a buy/sell order of 100 BTC exposure.
In a relatively short period, ByBit has become a preferred place for many crypto traders who like to use leverage while trading cryptocurrencies, and this has led to ByBit acquiring high liquidity.
ByBit’s matching engine is capable of handling high volatility of cryptocurrencies, which is often accompanied by large order volumes on leverage platforms.
As of now, BTC, ETH, EOS, and XRP are assets on the exchange for leverage trading and the trading fees charged is 0.025% on the maker side and 0.075% on the taker side.
Stormgain is a relatively new exchange launched in late 2019 and is quickly getting traction in the cryptosphere because of its high leverage multiples to trade cryptocurrencies.
It is registered in Seychelles and serving 120,000+ customers from 120 countries around the world. As of now, the exchange supports cryptocurrency spot trading as well as futures trading.
Its leverage offerings are one of the highest in industry and go up to 200x for certain cryptocurrencies. At the moment, BTC, LTC, ETH, BCH, and XRP are prime assets for which futures trading is in full swing with around $300 million+ volume each day.
The inbuilt option of purchasing cryptocurrencies using a credit card is available on the exchange to fund your leverage trading accounts. Moreover, Stormgain provides demo accounts for traders to become comfortable before trading real money, and in the non-demo account as a trader, you get the luxury of in-app trading signals too.
Binance is another famous exchange that needs no introduction if you have been into crypto space for some time now. But it is a spot trading exchange that started expanding in the crypto leverage trading in 2019.
In 2020, they have expanded very well in the futures contracts market, where they are offering leverage of up to 125x. But this huge leverage is not available for all the pairs and is only restricted to BTC/USDT, ETH/USDT, XRP/USDT, & ETC/USDT.
All other trading pairs of BCH, EOS, TRX, LTC, IOST, XMR, XLM, etc. leverage hovers from 50x to 75x. In total, Binance supports 20+ cryptocurrency futures contracts to help you make the most of crypto volatility.
So you can easily trade crypto futures with massive leverage on Binance, and you will face no liquidity issues because the daily volume is always regularly hitting $1 billion above.
Binance charges a maker fees of 0.020% and a taker fee of 0.040% for trading its futures contracts. The daily funding fees also seem to be quite less, but mind you, they provide only futures contracts whereas PrimeXBT & Stormgain are more like CFDs funded in Bitcoin, which are easier to trade than contracts.
Established in 2015, BitMEX remained the preferred venue for many early traders who liked leverage while trading cryptocurrencies.
Though it is no longer the preferred platform for cryptocurrency leverage trading, there are still a large number of traders who trade on BitMEX because of its high liquidity.
As of now, you can trade BTC/USD, ETH/USD, ADA, BCH, EOS, LTC, TRX, XRP on its crypto leverage trading platform to place a long/short position on any of these pairs at any price.
In terms of fees, BitMEX is charging 0.025% at the maker side and 0.075% taker side, which is the standard of the crypto leverage trading platforms.
What Is Leverage Trading Crypto?
Crypto leverage trading is essentially borrowing funds based on your existing funds to increase your position size and hence your market exposure to increase profitability.
Leverage term means, by what factor, you have increased your position. For example, 50x leverage means, it is an increase of 50 times. Suppose you had 1 BTC and are using the leverage of 50x, then this will increase your position to 50 BTC.
In this example, your 1 BTC works like the collateral for the other 49 BTC, which you are instantaneously borrowing out to trade based on your research.
Is it still confusing? Well, keep on reading the next section to understand it with an example.
How Trading Bitcoin (Crypto) With Leverage Works?
Leverage works by using a deposit, known as margin, to provide you with increased exposure. Essentially, you’re putting down a fraction of the full value of your trade – and PrimeXBT is offering you the rest.
Using leverage trading, you are only putting a fraction of funds. The rest is taken care of by your crypto leverage platform. For example, if you choose to leverage trade on PrimeXBT, its products will allow you to gain exposure to major cryptocurrencies like BTC, ETH, LTC, etc.
In a regular BTC/USD trade without leverage, if you want to buy ten bitcoins trading at the price of $10,ooo, you will be required to spare $100,000 (10 * $10,000) to open a position. Now, if the Bitcoin goes up by 5%, your 10 BTC will be now worth, $10,500 each, netting you a profit of $5000 on the original position of $100,000
Whereas if you trade using the 100x leverage provided by PrimeXBT, you would only be required to pay 1% of you $100,000 to open a position of similar exposure. Meaning, if you take 100x leverage, you are required to have only 0.1 BTC to get access to 10 BTC worth of $100,000.
Now, if the BTC price rises by 5%, you will still make $5000 in profit but considerably fewer funds on the line. This means, with leverage, you can open huge positions with a much larger exposure and multiply your returns.
But vice-versa is also true, but the downside is less compared to the exposure you are getting with your fraction of funds on the line. At the most, you can lose the 1% margin (or collateral) in this case if the leveraged trade goes wrong, but that’s only a fractional in comparison to the potential gains a successful trade can make for you.
That’s why leverage trading can be used to explore trading opportunities that would otherwise not be available — often, these opportunities are very profitable but have to be used wisely.
PrimeXBT & Stormgain are my preferred choices when it comes to trading cryptocurrencies on leverage. They are unquestionably the two most dominant leverage trading platforms today who offer leverage up to 200x.
However, leverage trading cryptocurrencies is a risky affair, so it is advisable NEVER to invest more than you can afford to lose, and this a thumb rule always.
Lastly, Bitcoin and crypto leverage trading is rewarding at the same time, if done correctly, if you are someone who prefers to do leverage trading in a guided environment do check out, our article on best crypto signals provides !!