Binance Embraces Margin
Announced just minutes ago, Binance , one of the world’s largest crypto exchanges, has launched margin trading. Per a blog post detailing the new product, this new product is part of Binance’s “effort to help push the industry forward and freedom of money”. Per a quote from the exchange’s beloved CEO, Changpeng “CZ” Zhao, the introduction of margin trading will also help his startup accommodate both “advanced institutional traders and retail traders” under one single roof, this being Binance.com.
For those unaware, margin trading allows investors to leverage their positions, meaning that they can borrow funds from the exchange to increase their risk, and thus return potential. In Binance’s case, users can take on leverage of up to three times their trade size, meaning that if a user has one Bitcoin, they can make a trade as if they had three.
To use this new system, which only is supported on some Bitcoin, Ethereum, Binance Coin, Tron, and Ripple’s XRP trading pairs for the time being, users will need to transfer their funds between their primary Binance wallet and their new margin wallet.
Binance’s unveiling of the newest product in its already rather extensive suite comes hot on the heels of Zhao’s announcement of futures trading. Per previous reports from Ethereum World News , at the Asia Blockchain Summit in Taipei, CZ released a sneak peek of Binance’s futures platform that will support up to 20x leverage.
Per a report on the matter from CoinDesk, the platform will go live “very soon”, but there are no concrete dates just yet. What is confirmed is that a “simulation test version” will be launched in a few weeks, potentially in line with the launch of the more regulated Binance United States.
As analyst Luke Martin notes, Binance will be the first crypto exchange in history to foray into the four types of exchanges: derivatives, regulated spot, unregulated spot, and decentralized exchange.
Crypto exchange types: 1/Derivatives: margin, swaps, futures (Bitmex, Bybit, Deribit) 2/Regulated: BTC & major alt focus, fiat on-ramps (Coinbase, Gemini) 3/Unregulated: Alt focus (Binance, Kucoin) 4/DEX Binance adding futures & becoming only exchange to be in every category. https://t.co/Ikp9pwOtyv — Luke Martin (@VentureCoinist) July 2, 2019
This news comes hot on the heels of pro-futures news made by other startups in the space. Announced Monday afternoon, ErisX, a Chicago-based cryptocurrency startup, has secured a “derivatives clearing organization” (DCO) license from the Commodity Futures Trading Commission (CFTC). This gives it the ability to launch physically-delivered Bitcoin futures. Both LedgerX and Bakkt are soon expected to follow suit.
The prominent cryptocurrency startup is soon expected to make a number of more announcements as it turns two. Also, the exchange will soon be booting of clients it has in the United States due to the regulatory concerns, and has opted to create an independent platform for Americans to fill in the gap and capture demand.
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