As cryptocurrency has become more popular, so have savvy investors’ instruments and strategies to capitalise on price swings. Forex and crypto traders are likely all familiar with the concept of margin trading. Now, Australians interested in margin trading can access several platforms, but how do they decide which is most suitable for them? Keep reading to figure it out!
What is Margin Trading in Crypto?
Margin trading in the financial markets, also called leveraged trading, is the practice of trading an asset class using borrowed funds. Most borrowed funds require an initial deposit to serve as collateral. Although the potential for gain is higher, so is the potential for loss in this trading strategy.
Margin trading in cryptocurrencies works in the same way. In this case, the crypto exchange acts as your broker, finding a potential lender on your behalf. An initial margin deposit or investment is required before making your first trade. The amount you wish to borrow determines your margin – the amount of crypto you need to enter into a leveraged position.
In a long position, you purchase a cryptocurrency to sell at a higher price in the future, so you profit from the price difference. This can also be accomplished without margin. In a short position, you borrow a cryptocurrency at its current price to repurchase it at a lower price for a profit.
The ratios 20:1 and 100:1 are used to express leverage. Therefore, if your trading account has $2,000 and you wish to initiate a long position with a 100:1 leverage ratio, you will need to provide collateral equal to 1% of your position size. The crypto exchange will give the remaining 99%.
Top 8 Margin Trading Crypto Platforms in Australia
Bybit
Bybit is the leading crypto margin trading platform due to its dependability and trustworthiness. It was created in 2018 and has quickly expanded to over 10 million members, with a daily trading volume of over $10 billion. Frequent traders can take advantage of substantial liquidity, 99.99% system uptime, and a trade speed of 100,000 per second.
Bybit offers the largest margin trading leverage, up to 100x, which is relatively generous given that some other platforms only offer up to 5x. You can maximise your returns by raising the amount you can borrow despite minor price swings.
The derivatives markets of Bybit include USDT Perpetual contracts, Inverse Perpetual contracts, and Inverse Futures contracts. Spot trading is also supported, with over 220+ coins accessible.
Bybit’s fees are highly competitive, with taker fees as low as 0.06% and maker fees as low as 0.01%, a tenth of what Binance charges!
Bybit additionally caters to the demands of its users by providing 24/7 Live Chat service and an insurance fund to safeguard traders against negative equity and excessive loss liability. If you want to start margin trading in Australia, Bybit is unquestionably an exchange you should try.
KuCoin
Kucoin supports over 200 distinct cryptocurrency pairs, making it an excellent alternative for margin trading. In addition to prominent cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Ripple, Dash, and EOS, you will also find lesser popular coins such as ZCash, Monero, Stellar Lumens, IOTA, and Decred.
KuCoin offers up to 100x leverage on most of its trading pairs and permits traders to set stop losses, take profit levels, and automated trades. The spread for BTC/USD is approximately 0.3%, and ETH/BTC is about 2%.
KuCoin also includes traditional FX trading, futures trading, spot trading, staking, P2P lending, and ICO listing, besides margin trading. With KuCoin, you can utilise both shorting and long positions without making a deposit.
This exchange provides excellent discounts, including no deposit costs, no transaction fees, no market taker fees, and high leverage rates. They provide leverage of 60x initially, 40x later, and 30x ultimately. KuCoin accepts USDT Credit Card, OKPay, PerfectMoney, WebMoney, Alipay, Union Pay, Western Union, etc.
KuCoin employs SSL encryption technology for data transmission, two-factor authentication using Google Authenticator, and offline seed phrase storage per BIP38. Their security methods ensure that your funds are secure and safe. Their customer support is also responsive and helpful.
Binance
Regarding trading volume, Binance is the largest cryptocurrency exchange globally, and it’s also one of the best trading platforms for Aussies. It’s no surprise that margin traders like it, with trading fees of 0.1% and a selection of 600+ coins.
Because of the platform’s size and popularity, there is an abundance of buyers and sellers, meaning that your orders will be filled quickly. Hundreds of trading pairs are supported, margin trading leverage can reach 10x, and short selling is an option for those who think a cryptocurrency’s price will fall in the near future.
Binance’s native cryptocurrency, BNB, can be used to further reduce the already cheap trading fees, much to the delight of frequent traders (BNB). When you pay with BNB, the 0.1% trading cost drops to just 0.075%, a discount of 25%. If you are a high-volume trader, you can enjoy discounts based on your activity over the preceding 30 days.
Binance also offers the unique feature of futures trading. Binance caters to seasoned traders in the financial and FX industries with features such as derivatives and other cutting-edge tools.
MEXC
Being one of the largest exchanges in terms of supported assets, MEXC offers more than 2,100 trading pairs. Several other currencies, including Bitcoin, Ethereum, USDT, Euro, Pound, Australian Dollar, Canadian Dollar, etc., are available for purchase and sale. It charges a flat 0.2% fee for spot trades, whereas futures trades range from 0.02% to 0.06% (maker to taker).
Users can trade against USDC, DAI, PAX, and LINK, among other prominent stablecoins, on the exchange, in addition to fiat currency. The trading platform also supports anonymous trading; therefore, there is no need for customers to go through a KYC procedure.
You can improve your prospective returns by borrowing money and engaging in “leveraged trading” on this platform. The maximum leverage allowed is 125:1, which doubles your money in half the time.
The Copy Trade tool is helpful since it lets users mimic a successful trader’s actions. This aids traders in gaining knowledge to improve their investing skills without requiring them to spend countless hours poring over charts.
Kraken
Kraken, founded by cybersecurity expert and software developer Jesse Powell just two years after Bitcoin’s debut, is a veteran cryptocurrency exchange. Powell worked in the cryptocurrency business before joining Kraken, assisting other platforms in their efforts to detect and prevent cyberattacks.
Kraken is available worldwide except for a few nations due to variances in legislative frameworks. You can join the marketplace to trade or acquire a wide variety of crypto assets with seven different fiat currencies: USD, EUR, AUD, CAD, GBP, JPY, and CHF.
Using margin for market and limit orders is as simple as clicking a button. Kraken’s margin trading features a 2:1 or 5:1 ratio for market and limit orders. You can short or long 19 different cryptocurrencies on the site, including Bitcoin (BTC), XRP (XRP), Ethereum (ETH), Tezos (XTZ), and Tron (TRX).
These kinds of services don’t come cheap. Kraken’s rollover fees (up to 0.02%) and open position fees (up to 0.02%) are both variable and dependent on your selected trading pair.
eToro
eToro has been around for a long time and has grown to become a well-known financial broker worldwide. Since its launch in 2007, the platform has provided over 13 million users with access to various trading products and services. eToro was among the world’s first exchanges to offer margin trading, initially for other asset classes and eventually for cryptocurrencies.
If safety is your first concern, look no further than eToro, which holds licenses from the Financial Conduct Authority (FCA), the Financial Crimes Enforcement Network (FinCEN), and the Australian Securities and Investments Commission (ASIC). The broker must follow their anti-money laundering and counter-financing of terrorism regulations to conduct business there.
Although eToro does not accept as many altcoins as others, it supports 16 of the best tokens in the market. Initially, the only way to invest in cryptocurrency was through contracts for difference (CFDs). You didn’t buy any crypto but instead pledged to cover the price difference if the asset’s value declined or pocket the gain if it increased. In 2018, however, eToro started allowing its customers to buy and store cryptocurrencies in its digital wallet.
People interested in margin trading can choose one of these tokens, trade it at 2x leverage, and increase their gain if the trade is successful.
Huobi
Since 2013, Huobi Global has provided users with a reliable platform for buying, selling, storing, and earning cryptocurrency. The markets on the exchange provide users with access to more than 300 digital assets. Huobi’s encrypted wallet protects users’ digital currency during transmission and receipt, preventing unauthorised parties from accessing their cash.
Spot trading, futures trading, margin trading, over-the-counter trading, peer-to-peer lending, and decentralised exchange (DEX) are just some of the services the platform offers for traders to participate in the cryptocurrency market. Huobi is an exchange that lists numerous cryptocurrencies and tokens, including Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Dash (DASH), and many others.
Spot Exchange, Margins Exchange, Futures Market (including ETH-USDT futures), Options Market, and Swaps Market allow individuals to engage in high-leverage trading of digital currencies.
Huobi has recently launched several new products to improve liquidity, such as Huobi Prime, Huobi Pro, and Huobi Smart Chain. If you’re looking for a high-quality trading terminal, go no further than Huobi Prime. Huobi Pro is an enterprise-level service offering verified users clearing, settlement, and custody options. Huobi Smart Chain is a protocol built on top of distributed ledger technology (DLT) for use in the banking sector.
Margex
The crypto exchange Margex is one of the newer players in the market. Their main priority is ensuring all transactions between buyers and sellers are completely protected. Margex is unique for a lot of useful extras besides its diverse payment options.
In addition to providing access to over 20 different trading pairs and round-the-clock client service, they also accept multiple currencies for deposits and withdrawals. For those who would rather not reveal too much personal information, they also provide a way to transact business anonymously. You can even make trades while maintaining your anonymity.
The exchange has maker and taker fees to accommodate different types of trades. For instance, makers receive a 0.01% fee, but takers pay 0.06%. Those willing to take the risk can receive leverage of up to 100 times their initial investment. Each day, you can take out a maximum of $100,000.
Regarding account security, every Margex user has access to two-factor authentication. Exchange procedures strictly adhere to the South Korean Financial Services Commission’s KYC regulations. They put all digital assets in cold storage, entirely safe from cyber thieves. The high level of security they provide sets them apart from other cryptocurrency trading platforms.
Conclusion
Various trading methods are available to Australians who wish to invest in cryptocurrencies. If you are an experienced trader who wants to engage in margin trading, any of the platforms on our list would be an excellent place to start. However, if you think that margin trading is too hazardous, you can choose popular crypto exchanges to practise crypto investment without the added risk of margin trading. For further details, read our list of the best cryptocurrency exchanges in Australia.
