Are you looking for the best crypto leverage trading platform because you want to increase your trading power? Well, then, it’s your lucky day! Below, you’ll find the list of the top crypto exchanges that are great for leverage trading. It includes such crypto platforms as Binance, Coinbase, Kraken, and the list goes on…
To be more precise, I handpicked a list of the top 7 best crypto leverage trading platforms out there. This will save you the hassle of going through numerous leverage trading platform reviews because you'll find them all in one place.
But first, it's crucial to fully understand leverage trading and why it is beneficial before moving on to the list itself.
We'll be reviewing the following cryptocurrency exchanges in this article:
Now that that's settled, let's get to it!
Best Crypto Leverage Trading Platform: What is Leverage Trading?
If you’re reading this best crypto leverage trading platform list, you probably already know a bit about leverage trading. However, if for any reason you don’t, or you’re just a beginner in this type of trading, let’s break it down.
The word “leverage” refers to increased trading power. If you want to make larger trades than your own funds allow you to, you can use your funds as collateral to participate in leverage trading. So, in the most basic sense, leverage trading allows you to trade crypto in larger amounts using borrowed funds.
Of course, it gets much more complicated than that.
Leverage comes in a variety of ratios, such as 3x (1:3), 20x (1:20), 100x (1:100), and so on. The ratio used to describe leverage indicates how many times your original capital is multiplied. So, for example, let’s say that you want to open a BTC position that is worth $2,000, but you only have $100 worth of BTC. In this case, you would need a 20x leverage.
Note that leverage trading is often referred to as margin trading. However, don't get confused. Although these two concepts are inseparable, they cannot be used interchangeably. For what it's worth, you should look at margin trading as a type of leverage trading, rather than a synonym.
Overall, there is a variety of leverage trading types. Margin trading, leveraged tokens, and futures contracts are among the most commonly used ones.
But why use leverage trading? Well, for one, it’s surely a way to get higher profits than you would be able with your own funds alone. Additionally, some traders use it to increase the liquidity of their funds. While they leverage a portion of their funds, they can use the remaining portion to participate in other types of profit generation.
Now, increased profits and fund liquidity surely sound great. However, do note that leverage trading carries high risks. While it brings high profits, it can also bring high losses. Besides, since the crypto market is unexpectedly volatile, leveraged positions are prone to forced liquidation. The higher the ratio of your leverage is, the bigger risks you face.
So, be careful when participating in leverage trading, or other types of high-risk investments for that matter. As the saying goes, don’t bite off more than you can chew.
That being said, let’s proceed to our best crypto leverage trading platform list!