Best Exchanges For Bitcoin Margin Trading (Complete Guide)
Margin trading is a tremendous tool one can use to trade Bitcoin and also other Cryptocurrencies with great leverage.
So, if you want to get started with margin trading Cryptocurrencies, you need to be familiar with the best exchanges for Bitcoin margin trading.
The best Cryptocurrency exchanges for Bitcoin margin trading are BitMEX, which offers leverage of up to 100x, eToro, which offers leverage of up to 400x, Huobi Pro, which offers leverage of up to 5x, Poloniex, which offers leverage of up to 2.5x, Kraken, which offers leverage of up to 5x, and Whaleclub, which offers leverage of up to 20x.
In this complete guide I am going to present you the best Bitcoin exchanges that you can use for margin trading and everything you need to know about it.
Let’s jump right into it!
What is Bitcoin Margin Trading?
Margin Trading Bitcoin basically is just a fancy way of saying “borrowing money to trade Bitcoin”.
This essentially means that you take out a loan from the exchange because you think that you can make more money on your trade. Then you pay back the loan you owe the exchange, the associated fees attached to it, and finally hope there is some money left for you the profit.
Seems like beginner-friendly stuff, right?
Well, not really…
Borrowing money to invest in risky asset classes like Cryptocurrencies isn’t the best financial advice I could gice you.
On the other hand, if you know what you are doing and are very confident that the price of Bitcoin can go up or down in the future, then using borrowed money to increase your potential profits dramatically could be a good decision.
Maybe you noticed that I said “up or down” in the paragraph above.
Because you can also make money with margin trading by shorting Bitcoin, which means that you think that the price of Bitcoin will fall, and if it does, you make money.
Shorting Bitcoin is also something I talk about on my complete guide on what to do when Bitcoin crashes, which you can read here in case you would like to learn more about it.
Basically, margin trading means that you take out a loan to make a trade and if you are right, you win money. On the other hand, if the prices of Bitcoin go in the opposite direction, you lose your money and owe money to the exchange.
BitMEX is a Cryptocurrency trading platform that has gathered a lot of respect in the Cryptocurrency community.
Same as margin trading, BitMEX really isn’t an exchange that is geared towards beginners. Rather, it is being developed by a team of economists, high-frequency traders and a bunch of seasoned developers making constant improvements to the platform.
The leverage you have on BitMEX for Bitcoin is 100x, and the fees aren’t that big either.
The maker fee on BitMEX for Bitcoin is -0.0250%. The taker fee is 0.0750% and the settlement fee is 0.0500%.
To get started with margin trading on BitMEX successfully, you will need to create a BitMEX account here.
I also really recommend you set up 2 Factor Authentication when creating an account at BitMEX. That way you do not only need your password, but also your Smartphone to get into your account. This extra security feature makes it a lot harder for hackers to break into your account.
Also, be aware that at the time of writing this article, BitMEX does not allow US customers to trade on their trading platform.
Does this mean if you are located in the US, you will have to travel to another country and change your residentship, just to be able to margin trade on BitMEX?
No, of course not.
The beauty of the internet is, that there are no country borders. You can simply change your IP address, so every website you visit will think that you are actually based in another country.
The question is: How do you do this and do you have to be a tech-savvy guru to do this?
The answer is, that it really does not require any special technical experience whatsoever, since you can just use a VPN.
A VPN is a virtual private network and it makes it possible to change your computer’s IP address to almost every country in the world, in a very beginner-friendly way.
By using a VPN, you can also trade on BitMEX by simply setting your IP address to another country with the click of a button.
I have been using the VPN service ExpressVPN for a long time now, and I can truly recommend it.
If you are interested and want to learn more about it, you can check out ExpressVPN here.
eToro is another very trusted Cryptocurrency exchange that you can use to margin trade Bitcoin, and also other Cryptocurrencies.
The leverage that eToro offers is a lot higher than the one on BitMEX, as you can leverage Bitcoin up to 400x on eToro.
The taker fee for Bitcoin on eToro is -1.547979% and the maker fee for Bitcoin is -1.547979%.
The spread of Bitcoin on BitMEX is 0.75%.
Again, if you would like to get an in-depth look at all the fees for all sorts of Cryptocurrencies on eToro, you can check out this page.
So, what do you need to get started on eToro?
Actually, not much, and the good news is that you do not need a VPN to gain access to its trading platform, as it supports a lot of countries, including the United States, of course.
To get started with margin trading on eToro, you will need to create an account here.
Once that is done I recommend you complete your profile, so that you can enjoy depositing more than 2000 US Dollars into your eToro account.
As with any other important account you have, I recommend you set up 2 step authentication for your eToro account, that way you will be more protected against malicious hackers.
Huobi Pro is another trading platform that you can use to margin trade Bitcoin.
It was founded in 2013 and has its exchange headquarters in Singapore. But it really is a very international exchange and alongside supporting a variety of different languages, Huobi Pro also has offices in Hong Kong, Korea, Japan and in the US.
In order to get started with margin trading you will have, as with any other trading site, to open an account with them here.
What’s different on Huobi than on different exchange is, that only people in China and the United States are able to trade on their trading platform right now.
Also, you will not be able to start trading with only an E-Mail right away on Huobi Pro. You will have to provide your official documents, so Huobi can verify your identity. This can take a few days, so you will not be able to start trading immideately.
Huobi Pro really doesn’t allow the kind of Bitcoin margin trading as it is possible on BitMEX or on eToro, where you are able to leverage hundreds of times.
On Huobi, the maximum leverage that is allowed is 5x.
The maker fee on the Huobi trading desk for Bitcoin is 0.2% and the taker fee is also 0.2%.
While all Cryptocurrencies on Huobi have the same fee structure at the time of writing this article, this could change in the future, so to get the updated information on Huobi’s fees, click here.
Poloniex has been a Cryptocurrency trading desk for quite some time now and you can use it as well to do margin trading on it.
In order to start trading on Poloniex, you will have to create an account here.
You can start trading on Poloniex right after your signed up, but in order to increase your limit, meaning how much money you will be allowed to operate with on Poloniex, you will have to submit an official document of yours, like a passport, so they know who you really are. (This is required on most exchanges, in order to comply with anti-money laundering laws for example.)
The approval process of your official documents is usually faster on Poloniex than on Huobi, since you will get (hopefully) approved in a matter of hours.
The leverage with which you can margin trade on Poloniex really isn’t that high, as the maximum leverage they allow is 2.5x for Bitcoin trades.
The maker for Bitcoin trades on Poloniex is 0.1% and the taker fee is 0.2%. That is, if you are planning on trading below 500K US Dollars per month on Poloniex.
If you are operating with more US Dollars than that, the maker and taker fees will get less and less.
So much so, that if you are trading with more than 7.5 million US Dollars on Poloniex, the maker fee is 0% and if you are trading with more than 30 million US Dollars, the taker fee will also shrink to 10%.
The fee structure is more complicated than what I presented above, so if you would like to have a look at the complete fee structure on the Poloniex trading desk, check out this resource made by Poloniex.
Again, as with all the other trading accounts, don’t forget to set up 2-Factor Authentication, as it is way more secure than if you just rely on your passport to protect your Poloniex account.
Kraken is a well-known Cryptocurrency exchange that is used by many beginners as well, to simply get hold of some Bitcoin or Ethereum.
But what you maybe didn’t know is, that Kraken also offers some advanced capabilities, like the feature to do margin trading on their platform.
Kraken is located in the United States. In San Francisco to be more precise and is a very well-known Cryptocurrency exchange not only in the United States, but also in Europe.
Signing up for an account on Kraken is easy and you can start the sign-up process on Kraken here.
However, you will only be able to trade with FIAT currencies, such as the US Dollar, the Euro, Pounds or Canadian Dollars, after you successfully completed the whole verification process, which includes sending Kraken a photograph of an official document of yours, like your passport.
The verification process of Kraken takes usually a long time, as the normal wait time until your official document gets approved is around 7 days.
Kraken offers a leverage of up to 5x for Bitcoin trades.
As with Poloniex, the fees you will have to pay really depend on the amount of money you are operating with, so to get the full picture, check out their official fee-page here.
If you are trading with less than 50000 US Dollars, you will have to pay a taker fee of 0.26% and a maker fee of 0.16%.
On the other hand, if you are trading with more than 10 million US Dollars on Kraken, you can enjoy 0% maker fees and 0.1% taker fees.
The last Cryptocurrency trading platform I am going to present to you today is Whaleclub. Whaleclub is a Hong-Kong based exchange, where you can also trade commodities and forex, aside from Cryptocurrencies.
Whaleclub is a pretty unknown name in the Cryptocurrency space yet, as it has only been on the market since 2016.
To get started on Whaleclub, create an account for free here.
You can leverage Bitcoin trades on Whaleclub up to 20x and you have a maximum size of 40 Bitcoin.
The spread is 45, or 0.5% and the financing is 9%.
Out of all the exchanges I presented to you, I would personally recommend this Cryptocurrency the least, as it is the least-known one and it has received some harsh critisisms in the past.
Nonethless, you can try it out if you want and judge for yourself.
So, these are the top Cryptocurrency exchanges out there at the moment of writing this article which you can use to do margin trading.
Some of them support leverage of up to 400x, while others only have a maximum leverage of 2.5x.
I recommend you choose an exchange based on your needs and your expertise in trading in general.
And always remember, that margin trading is very risky, especially if you are not very experienced in that field. This is because you are essentially taking out a loan and if you don’t manage to pay back the loan, you will get into trouble.
Now I would like to turn it over to you: Which Cryptocurrency exchange will you try out next? Maybe Poloniex, or Kraken?
Let me know in the comment below and I will be sure to get back to you as soon as possible!
Anyways, thanks for reading all the way to the end of this article and I hope I could serve you well.