Bitcoin Futures at 20x Leverage: How Does Binance Compare to the Crypto Competition?
The leading cryptocurrency exchange and industry sweetheart, Binance, has made a number of strides that will greatly improve the appeal of its brand, and has even taken steps to comply with regulators and will be opening up a US-based exchange offering Bitcoin and other US-approved crypto assets in the coming weeks.
But before that operation gets going, Binance is once again reinventing itself and is preparing to offer Bitcoin Futures contracts at up to 20x leverage in addition to the margin trading the firm recently rolled out the beta version of. The addition of margin was met with a lackluster response due to the perceived low-leverage of just 2x maximum – will 20x Bitcoin Futures trading appease the masses looking for more from the industry leader?
Binance to Add Bitcoin Futures Trading with 20x Leverage
Binance is among the biggest names across the crypto space and for good reason. The company often is ahead of the trend, does right by the greater community at large, and is known for keeping funds “SAFU” under any and all circumstances.
The crypto community loves Binance for its exotic altcoin collection, Binance Coin token, and especially for its CEO Changpeng Zhao. The only negative press Binance has seen in recent weeks has been the lackluster debut of its margin trading products, and the company buckling under pressure from US regulators to block the country’s citizens from using the platform.
.@cz_binance just announced that #Binance will offer futures contracts in his keynote at the @aba_summit! #ABS2019 #Taipei #Futures pic.twitter.com/RXlui8YY0V
— Binance (@binance) July 2, 2019
While complying with regulators is painful for crypto traders, it’s understandable for an industry leader looking to maintain its top spot. Margin trading is an entirely different beast, and while it’s nice to see leverage on Binance not too high given its users can buy crypto to trade on a credit card, 2x is low by any standard.
Related Reading | Clearing Up the Crypto Confusion For US-Based Binance Traders of Altcoins
In what may be a move to offer a more attractive leverage point or simply to cater to a different type of trader, Binance has revealed that it will launch a new Bitcoin Futures trading platform fittingly called Binance Futures that offers up to 20x leverage.
How Does Binance Futures Leverage Stack Up to the Crypto Competition?
While speaking at Asia Blockchain Summit in Taipei, Binance CEO Changpeng Zhao said that Binance Futures will only support BTC/USDT Futures with up to 20x leverage initially, but that more pairs and higher leverage is planned in the future.
While 20x leverage is certainly more attractive to traders seeking to margin trade than the 2x Binance had announced for their margin trading product, it’s still far less than most other exchanges across the industry.
Here we go!@binance just announced Binance Futures which will support 20x leverage for Bitcoin futures in the coming months.
More sophisticated products. More liquidity.
The virus is spreading
— Pomp
(@APompliano) July 2, 2019
Both BitMEX and PrimeXBT offer 100x leverage, and Bitfinex recently revealed plans to launch a Bitcoin derivatives product with up to 100x leverage. Newcomers ByBit and Deribit also boast 100x leverage.
These exchanges are likely to overshadow Binance’s 20x leverage until the company follows through with the promise of higher leverage in the future. However, the 20x leverage does easily trump the 2x Binance itself offers, and even beats other crypto companies offering leverage. OKEx and Kraken each offer between 3x and 5x leverage, while Bitfinex only currently offers up to 3.3x currently.
Related Reading | CNBC Featured Crypto Trader: Margin Trading is Key to Capture Market Share
Margin trading has recently become a hot trend across the crypto space. Even Coinbase has said it is considering adding merging trading in the future. With Binance expanding its footprint into trading with leverage, Coinbase will have a lot of catching up to do to go toe-to-toe with Binance, which it itself struggles to compete with others who have offered margin trading as the foundation of their platforms.
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Tony Spilotro, Khareem Sudlow
