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Home Cryptocurrency news Bitcoin

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

Tony Spilotro by Tony Spilotro
2 years ago
in Bitcoin, Cryptocurrency news, Ethereum, Ripple
Reading Time: 3min read
Will Bitcoin Margin Trading Help Binance and Coinbase Survive Big Banks Entering Crypto?
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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.

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Related Reading | Next Bitcoin Bull Run Will Be First Cycle Supported By Established Financial Firms

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.

Related Reading | Crypto Assets Compared to Dot Com Domains Shows Unrivaled Growth Performance 

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.

Binance only allows 2X Margin trading? That's kinda disappointing 🙁

— Hisoka (@HI3OKA) May 30, 2019

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.

Tags: banksBinancebitcoincoinbasecryptofidelityJP Morgan
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a digital media executive and global remote work leader with a decade of content experience and excellent. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter and feel free to drop me a line if you would like to work together.

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