Will Bitcoin Margin Trading Help Binance and Coinbase Survive Big Banks Entering Crypto?

Tony "The Bull" Severino

6 years ago

3 mins read

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There’s a shift beginning across the crypto market: institutions are finally entering, and it’s already having a powerful impact on the price of Bitcoin. This also means that the crypto mainstays of the last bull run – such as Binance and Coinbase – are in danger of being decimated by established traditional financial firms with trillions of assets under management who are beginning to enter the space and cater to the growing institutional demand.

This has prompted the current industry powerhouses to step up their game, adding new features, and serving the needs of more advanced traders and investors by adding trading options like margin, which the exchanges have not offered in the past. But will margin trading and other features geared toward more advanced traders be enough to prevent total demise at the hands of the likes of Fidelity and other Wall Street behemoths.

Investment Analyst: Crypto Going Mainstream Spells Doom for Coinbase and Binance

The battle for the top crypto exchange has heated up in recent weeks, as each platform introduces new features that appeal to a broader range of more experienced investors.

Unfortunately, though, the attempt may be futile now that “big banks” and “large brokerage houses” are entering the crypto market, according to investment research analyst Ahmad Khokhar.

Hate to break it to you, but if crypto is going mainstream, 'Big Banks' and large brokerage houses will eat @binance and @coinbase alive. They will either be acquired or they will go out of business.

At the end of the day, who you align with will come down to fees/service. https://t.co/WP6BM4gGAt

— VisionX (@VisionCodeX) May 29, 2019

The analyst asserts that while the crypto community argues over who will dominate the crypto market between Coinbase and Binance, they are in grave danger of being “acquired” or going “out of business.” Kohkhar says that “big banks” such as Fidelity and JP Morgan will “eat Binance and Coinbase alive.”

Margin Trading Debuts on Beta Binance 2.0, Industry Reacts

The power of these businesses, some with decades of investment experience and trillions of assets under management cannot be understated. And as was witnessed during the dot com bubble with Microsoft and Netscape, being first and dominant doesn’t always last.

One way these early crypto exchanges are hoping to stay ahead of the pack is by adding margin trading options when most investors using the platform have been restricted to spot buying and selling of crypto assets. Coinbase CEO Brian Armstrong said his firm is considering margin in the future during a recent Youtube AMA, and Binance just today launched the beta version of “Binance 2.0,” as they’re calling it – complete with margin trading pairs enabled with 2x leverage.

Binance margin (beta) is live

Pairs: $BNB, $BTC, $ETH, $TRX and $XRP
max leverage x2https://t.co/pM6RDiGnUL pic.twitter.com/1r2zdz1S4W

— unfolded. (@cryptounfolded) May 30, 2019

However, the crypto industry is already showing much disappointment in Binance’s max leverage of 2x. While some top traders predict that margin trading could be the key to Binance achieving wild success, the 2x leverage falls significantly below the 100x offered by BitMEX and Deribit. It’s even below the 3x and 5x leverage offered by Kraken, Bitfinex, and OKEx, leaving traders eager to take the new Binance for a spin feeling let down.

https://twitter.com/hi3oka/status/1134085719205584896?s=12

Binance also announced the assets that are available for trading using margin and they include Bitcoin, Ethereum, Tron, Ripple, and their native BNB token.

Binance just announced the margin trading pairs that will be available.#Bitcoin #Blockchain #Trading #CryptoCurrencies pic.twitter.com/Dc2o5uNS39

— Crypto Rand (@crypto_rand) May 30, 2019

The lower leverage may also be Binance being a responsible member of the crypto community, as a crypto exchange offering the ability to purchase highly volatile assets using a credit card, then immediately turn around and trade those assets on leverage is a recipe for disaster for the company’s userbase, which is likely rife with retail investors that would be experiencing margin trading for the very first time.

Only time will tell if these latest moves will be enough to help Binance and Coinbase survive against the big banks that crypto was designed to stand up against.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.