What is Leverage Trading in Crypto and The Best Platforms for It

In trading, one of the most popular terminologies is leverage trading. It exists in all types of markets, and it gives the investors an edge to earn extra profit. Also, it comes with a huge risk. However, not many people know what leverage trading is.

If the same goes with you, too, then in this article, I am going to talk about what leverage trading is and what platforms you can use to enjoy leverage. So here we go:

What is Leverage Trading in Crypto?

Leverage trading is a great tool for anyone who wants to maximize their profits by taking high risks. It allows the investors to make spot transactions. This means you have to purchase and sell your order within a given period of time.

In leverage trading, to maximize your profits, you have to borrow capital from a cryptocurrency exchange. Different exchanges pay you a different percentage of cash depending on the amount of cash you have in your trading account.

Once you borrow capital, it will exceed the total amount of funds you have. As a result, you will be able to put more money in the market and earn bigger profits.

For instance, if an exchange is offering a 10x margin and you have $100 in your account. Then you will be able to trade with $1000.

While it seems like a great idea to use leverage trading, you should know that it comes with high risks. In case if the market does not go as your expectations, you may have to face huge losses.

Also, as you already know, the crypto market is extremely volatile. Hence, if you are a beginner, it is recommended that you should stay from leverage trading.

But yes, you can always put a little amount of money into the market and understand your risks when you are starting up. This way, you will not really end up losing too much money if your trade does not go as planned.

Best Crypto Exchanges for Leverage Trading

In collaboration with The Money Mongers (TMM) we researched some of the best crypto exchanges one can use for Leverage trading.

1. Binance Futures

Binance is one of the largest cryptocurrency exchanges available out there. The exchange has been introducing newer features since its exception. Also, it allows its customers to enjoy leverage trading with Binance futures.

With Binance, you will be able to trade in more than 200 different cryptocurrencies. So you can enjoy leverage trading on almost all the popular coins. Plus, as it is widely used. As a result, you will always have a buyer or seller for your orders.

As far as the leverage limit is considered, the exchange offers a different leverage limit on your investments. The minimum leverage is 20x. Also, if you are a new user to the platform, you will not be able to exceed the 20x leverage within 60 days. This decision has been taken to safeguard its consumers from huge losses. 

2. ByBit

Next, there is the ByBit. It is also one of the most trusted cryptocurrency exchanges available out there. The platform is designed to make trading extremely easy.

Plus, it offers a seamless experience to margin long or short coins like Bitcoin, Ethereum, EOS, and others up to 100x leverage.

On ByBit, you will be able to open positions with a margin and then use leverage to increase the capital. Also, it comes with lots of features such as hedge mode, maintenance margin, conditional mode, etc. 

Even not just leverage trading. The platform can also be used for spot trading. So you can easily buy and sell crypto at the best rates possible.

3. FTX

FTX is also one of the best crypto exchanges for leverage trading. The platform was built by traders for traders.

The exchange sets itself apart from other exchanges by offering its customers a wide range of indices and leveraged tokens, which you can trade in the futures or options market.

Research from Themoneymongers.com revealed FTX exchange has also developed an innovating asset for crypto traders, which is known as leveraged tokens. These are ERC20 tokens that have exposure up to 3x applied to the trading pair.

Moreover, there is also no margin required for the FTX account balance to start trading in leveraged coins.

Overall, you will also get up to 101x leverage on crypto trading pairs. Plus, the best part is that you can start trading without KYC and withdraw up to $2,000USD daily.

4. Huobi

Huobi is also one of the trusted platforms to buy and sell cryptocurrencies. The platform sells more than 348 digital assets, and it is operational in more than 195 countries.

The exchange offers a wide range of crypto coins for you to trade. Also, there are different ways to get into trading. For instance, spot exchange, merging exchange, future market, options, and USDT swaps.

Also, it supports leverage up to 125x. Moreover, you can also hedge your positions by short-selling Bitcoin to balance a crypto portfolio and exposure to market conditions.

Conclusion:

So that was all about what is leverage trading in crypto and the best crypto exchanges for leverage trading. Now go ahead and check the platforms out and see which one is working the best for you. Also, for any other questions, do comment below.