Coinbase has launched a margin trade option on its Coinbase Pro platform, offering American users the chance to leverage trade up to 3x on USD-paired coins. US users have been poorly served by margin trading platforms, given that they are not allowed to use popular sites like BitMEX, so the fact that they now have an option will please many, even though the maximum of 3x leverage is way short of those offered by other sites.
Starting today, Coinbase Pro customers in 23 US states can access up to 3x leverage on USD-quoted books. Trading crypto on margin (or leverage) can amplify the impact of your trades by allowing you to borrow additional funds. https://t.co/RZTiV0eUpf
— Coinbase Pro (@CoinbasePro) February 12, 2020
Coinbase announced the addition to their platform via a blog post which showcased the clean-looking interface, which they said they hoped users would find “intuitive, yet highly sophisticated and functional.” Users must live with one of the 23 states supported, although institutional traders from 43 states and 9 international countries are allowed.
Adding that margin trading should be “deployed as part of a responsible trading strategy”, the use of a maximum 3x leverage is a sensible move designed to protect users while adding a new line of revenue for themselves. Unsurprisingly, Coinbase revealed that margin trading had been one of their most requested features, and one that sees them following in the footsteps of other exchanges such as Binance, who have gone heavily into the leverage trading market.
Coinbase Seeks to Head Further Afield
Coinbase adds that over the next year they plan to increase the geographical spread of their margin trading product as well as adding more assets to its leverage markets, just in time for the next market cycle. This may well have been why Coinbase has delayed launching the product, in order to capitalize on the recent market resurgence which, presumably, they see as being part of a longer-term uptrend.
Leverage Trading Gre During Crypto Winter
Many exchanges have found that leverage trading has been the only way they have been able to generate sufficient revenues during the crypto winter, which margin-focused exchanges like ByBit marketing themselves heavily on the premise, which some have seen as detrimental to the market. What is certain however is that new entrants into the market will likely find it hard to resist the allure of heavily magnified gains on top of all those promised by unscrupulous trading groups.