Digital assets market is a volatile sector where investors are always at risk of losing their funds. Within crypto trading practices, some trends are riskier than others, such as purchasing an NFT. One such practice is call as ‘margin‘ or ‘leverage‘ trading of crypto assets.
The ‘Margin’ Crypto Trading made it to the headlines recently after the Canadian government decide to levy a ban on margin trading being offer as a service to Canadian residents by local as well as international exchanges.
Margin trading, also call as leverage trading allows customers to borrow capital from a broker to invest in crypto assets.
The broker can be an individual as well as an entity such as a crypto exchange that offers the service.
This practice enables traders to access more capital than what they originally have to bet on a crypto asset.
This capital is back by a collateral.
In simple words, if a trader has Rs. 100 and the exchange being use offers 10x margin on Bitcoin trade, the trader will be able to place an order of up to Rs. 1,000.
And this can potentially lead to larger profits, it also increases the risk of major losses.
Canada prohibit exchanges from offering margin trading for Canadians as part of its recently release rules that aim to safeguard digital assets investors against financial risks.
At a time when India is batting for global rules for the crypto sector under its G20 Presidency, Nagpal has advise the nation to follow Canada’s decision on exchanges offering margin trading.
Binance, the crypto exchange in the world, is one among many popular exchanges that offer margin trading services.
ByBit, Kraken, KuCoin, and Bitmex are also renown crypto exchanges that offer the risky feature, Coinsutra had list in a recent report.
DISCLAIMER : Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provide in the article is not intend to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offer or endorse by 2YoDoINDIA. 2YoDoINDIA shall not be responsible for any loss arising from any investment base on any perceive recommendation, forecast or any other information contain in the article.
