According to Bitcoin.com, the latest trends in the crypto realm is margin trading and initial exchange offerings. One particularly popular exchange is Bibox, which is known for offering leverage of up to 3x on BTC.
The platform also started offering IEOs by launching four projects on Bibox Orbit. These include the force Protocol, Ludos, Staking, and X-Block.
Another platform that is following a similar trend is FTX. The platform is a derivatives exchange that is supported by Alameda Research, a trading form which offerings futures leveraged tokens at up to three-fold. It also offers OTC trading.
Together, the exchange can mitigate the impact of going short on bitcoin and other digital assets. The many options may it easier for those who trade bitcoin to find a platform that works well for them and their needs.
The diversity in platforms available means that users may want to take a closer look at what each platform offers. For instance, there are exchanges that offer margin trading on coins such as ETH, BCH, and BTC and there are those that stand outside the traditional mode and offer leveraged futures.
Those who opt for leveraged futures may want to take into account that there may be downsides to doing so.
Leveraged exchanges should have an insurance fund in place. One example is Bitmex, which has one that is closed to 24,000 BTC in value. However, not every exchange features such a high value. Rather, smaller exchanges are unable to sustain such an amount.
Another issue is if the exchange does not have the proper management in place to prevent losses. Therefore, users may want to look carefully at the exchange that they are interested in before joining.
One exchange that had an issue last year was Okex, which experienced a 9M clawback when a trade placed significant BTC order, which was liquidated when the asset crashed. According to FTX,
“If a user has a leveraged futures position on and markets move against their account that their net asset value is negative, then someone has to pay for that loss. In crypto, you can’t repossess assets from the bankrupt account owner’s from outside the system, so you’re stuck with other users – the users who aren’t getting liquidated – footing the bill.”