Margin trading has been teased for a couple of months by Binance, but it has finally arrived in its fullest form.
In the beginning, the first rumours started when a specific boolean was spotted in the new Binance API after an update in March. The boolean very specifically mentioned margin trading, but it was disabled at the time. Many traders started speculating on Reddit, whether or not this would be beneficial for the market or not.
Later, Binance started teasing margin trading by saying that only a select few will be able to use it, but now it’s been officially confirmed that the select few was referring to currency pairs and not investors themselves.
A Beta version has already been launched which allows margin trades on cryptos such as Bitcoin BTC, Ethereum ETH, TRON TRX, Ripple XRP and Binance Coin BNB.
The sole reason why traders were anticipating an upcoming margin trading platform for Binance, was due to the leverage that was supposed to be offered to them.
Although there are more than enough crypto exchanges that offer 1:100 leverage, Binance only offers 1:2, which is still more than enough for most traders to score the largest profits possible on the crypto market.
There are some restrictions to the margin trading platform though. At the moment, only traders that have been personally invited by Binance can participate. So if you didn’t receive an email calling you to place traders on margin, you’ve most likely not been chosen.
Furthermore, if you’re a US citizen you can pretty much forget about being chosen as Margin trades in the US are under such a complicated regulation that Binance didn’t even bother with it.
It is most likely that this invite system is to test how much Binance’s customers can make on margin trading cryptocurrencies, and how much it would cost the platform itself, or how much it’s able to generate with the lowest amount of risk.
What does this mean for the market?
For the market itself, it means that more and more traders can now enter larger positions and earn much more in crypto capital gain. This means that the overall trading volume is going to at least double thanks to the 1:2 leverage and the crypto traders themselves will be able to make more profits through successful trades.
Assuming that the margin trading winners re-invest in the crypto market, it’s expected to see market prices rise up to new heights over the course of a couple of months.
Furthermore, it’s expected that more traders will start switching over to crypto margin trades, rather than crypto CFD trades, therefore the traded volume will increase even more.
At this point, the coins that are going to benefit the most from leveraged trading are XRP, BNB and TRX as they’re much lower in terms of price, and therefore much more attractive to the new market entrants.