Over the last week, several rumors have started to circulate about Binance potentially launching a margin trading feature.
The claims were initiated in an exclusive report from ‘The Block’ in accordance to a source close to the situation, purporting that Binance is on the verge of providing its millions of users access to margin trading opportunities.
Since then, more clues pointing towards the possible feature launch have emerged to support the claims. Code was found within the official Binance rest API documentation to suggest that the crypto trading giant is considering the implementation of margin trading.
The discovering programmer, who goes by the alias ‘enriquejr99’, posted details of the find on Reddit. This was followed up by a post by ‘lifofifo’ 5 days ago who found that the API documentation had been further altered, showing that the ‘isMarginTradingAllowed’ flag was enabled for the trading 9 pairs, made up of a variety BTC, BNB, ETH, USDT, and XRP combinations.
Confirmation from CZ
After the recent Binance Hack, CEO CZ then carried out AMA where he confirmed that Margin Trading would be coming to Binance in the future:
#Binance margin trading confirmed, security breach update, Launchpad timeline & possible future stablecoin.
— Binance (@binance) May 8, 2019
Margin trading has significantly grown in popularity over the last year, evidently with the highest leverage providers, BitMEX and PrimeXBT, both increasing their trading volume and new user numbers. It can be assumed that Binance is looking to capitalize on this trend as crypto traders and markets mature, thus requiring more sophisticated trading strategies.
Depending on the amount of leverage Binance may or may not provide, it certainly won’t be the first crypto trading platform to extend margin trading facilities to its clients. Other exchanges include Kraken, Bitfinex, OkEX, and most notably BitMEX and Prime XBT.
BitMEX and Prime XBT stand out as the superior margin trading platforms as they are primarily that, whereas the others mentioned are primarily basic exchanges that feature some margin trading options, but in much smaller amounts (up to 5x at most).
BitMEX offers up to 100x leverage (long and short positions) for BTC trades, reducing to 50x to ETH, 33.3x to LTC, and 20x to BCH, XRP, and ADA.
Prime XBT also offers up to 100x leverage but is available to use on all major crypto-assets including BTC, ETH, LTC, EOS, and XRP.
The newcomer Prime XBT has notably also recently expanded its asset offerings to include forex, commodities, and stock indices with varying leverage allowances of up to 1000x. This is significant – since Prime XBT is a Bitcoin-based platform now allowing anyone who owns cryptocurrency to tap into the worlds most profitable traditional financial instruments as well.
One Size Doesn’t Fit All – Trading Platform’s Included
Despite Binance’s recent launch of a fiat-crypto gateway, Coinbase is still the most preferred exchange for fiat-crypto transactions and will likely remain as such, as it is their forte. In contrast, Binance is undoubtedly one of the best and most famous crypto-crypto exchanges for altcoin trading and will likely remain as such.
When there are so many trading platforms, one simply can’t be the best in all aspects. A variety of different trading accounts exist to accommodate for different trading strategies. Each one should rather concentrate and master one product.
No matter which way you look at it, it’s clear that crypto margin trading is here to stay. With a major player like Binance dipping its toes in the leverage pool, simply demonstrates the serious demand for such advanced trading strategies. However, it is very unlikely that Binance will replace BitMEX or Prime XBT as the ‘place to go’ for crypto leverage trading.