Binance, a leading cryptocurrency exchange has been making big strides and adding new product offerings for customers over the past few months. Binance has given their users a sneak peek into its margin trading screen and the reception has been fairly positive as its native token, BNB, surged as much as 10% in response.
On July 1, Binance tweeted: “@cz_binance just announced that
#Binance will offer futures contracts in his keynote at the @aba_summit! #ABS2019 #Taipei #Futures“ – and during their announcement, warned that while margin trading can deliver “higher profits”, there are also “greater risks.”
This announcement from BNB teased investors, and so far has been without any regulatory backlash. BNB is a utility token and not a security, which has made it increasingly popular for investors. This announcement brought an increase in volume and price as BNB soared roughly 9% following their announcement. The broader crypto market also trades in the green.
BNB Price Action
BitMEX’s CEO has been ruling the bitcoin margin trading market for a while. Earlier in June 2019, Hayes tweeted that the exchange set a record with trading volume of over $10 billion over a 24-hour period, thanking volatility and traders.
Coinbase already supports margin trading for institutional investors for up to three-times leverage, but they are now exploring the possibility of introducing margin trading on their platform for individual investors. Additionally, Coinbase announced their plans to launch a debit card in the U.S. during an AMA on YouTube.
Binance’s margin trading has the potential to usher in more crypto traders in the space and expand it to more jurisdictions than ever before. Crypto’s regulatory framework has been slowly unfolding in the U.S and it is currently unclear if Binance will support margin trading for U.S traders. In fact, in June 2019, Binance made an announcement that it will restrict U.S. users. What does this mean for U.S. investors on the Binance platform? They will have to wait until a compliant exchange is launched for their U.S.-based supporters.
Binance has been marketing its margin trading much before its actual launch, this could be in the light of the recent hack. The loss of $41 M was compensated using Binance’s SAFU fund and this was a major blow in the faith of investors. Some might argue that this could have resulted in the loss of user faith in Binance while others praise the use of SAFU to protect their investors from bad actors. CZ has personally been shilling BNB and promoting Binance as a home grown brand and its value has shown an increase in price and consumer confidence.
Binance’s margin trading announcement is an example of pushing forward in the face of adversity.
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