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Best Bitcoin Leverage Trading Platforms for Margin Trading

Bitcoin Margin Trading: Leverage Your Trades

Last Updated on 18/07/2024

Gameland has made a name as a valuable resource for crypto traders looking to better understand the market. Our Bitcoin leverage trading guide is an excellent kick-starter to a rewarding trading journey.

We’ll walk you through the process we use to identify the best Bitcoin leverage trading platform from seemingly similar exchanges. Our team of experts will also explain how margin trading works and share some tips you can use to mitigate the risk associated with this activity.

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Compare the best Bitcoin trading sites

Our Top Picks
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Kraken
Recommended
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3.8/5
  • Detailed crypto guide
  • Supports all major cryptocurrencies
  • High-level security
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Accepts Customers from
USA
USA
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MSB - Money Services Business (USA)
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Coinbase
Hot Offer
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3.8/5
  • Loads of crypto options
  • Airtight security
  • Supports NFT trading
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T&Cs apply, 18+
Payment Methods
PayPal
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Visa
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Accepts Customers from
USA
USA
License
SIPC - Securities Investor Protection Corporation (USA - not governmental)
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Who should make use of this Bitcoin comparison: Both new and established traders

Bitcoin leverage trading is hands down one of the riskiest and most potentially profitable trading strategies. With almost 600 cryptocurrency exchanges to choose from globally, the market is sparking interest from current and prospective traders alike. If you’d like to put a toe in the water, there are just too many platforms to sift through before you can single out the best one to sign up with.

Not sure where to begin? This Bitcoin comparison gives you the low down on how to kick off your leverage trading journey the right way. By the right way, we mean joining not only the best Bitcoin leverage trading platform but the most suitable one for you. We’ll arm you with the expertise you need to pick the appropriate crypto exchange and fill in the blanks if you’re new to the trade. This guide serves both new and established traders hoping to gain considerable insight to initiate or enhance their trading journeys.

Top 5 factors we look for in a Bitcoin trading platform – our secret sauce

First off, let’s walk you through the process we adopt when evaluating Bitcoin leverage trading platforms. As we mentioned before, Bitcoin leverage trading platforms are a dime a dozen. Only a few make sense for secure investments. A team of skilled crypto gambling experts is behind this unbiased review. After a lot of digging, only exchanges that impress in the following areas get our stamp of approval.

Safety and security first

Safety and security are two of the most vital components to consider when choosing a Bitcoin leverage trading platform. We make it our utmost priority to favor exchanges that don’t mince their security position. Such platforms readily display the security measures they offer for all to see. That’s a noble move considering crypto trading isn’t governed by federal laws. While the safety measures differ among exchanges, we look at the platform’s ability to store cryptocurrency offline to avert risk. We also consider security measures like cold storage systems, insurance policies in the event of hacking, and encryption technology.

Trading costs

Before investors start Bitcoin trading with leverage, they must first establish how much it’ll cost to buy and sell crypto on the exchange in question. We don’t doubt that most, if not all users, are inclined to pick platforms with lower fees. When evaluating a Bitcoin leverage trading platform, we consider the types of fees leveled. Does the exchange charge a convenience or transaction fee each time you trade? Convenience fees are usually displayed as a percentage of your assets’ market price for a given trade. Ideally, the lower the percentage, the better. We also check if the platform displays some level of transparency by showing the quoted price before any transaction is finalized. 

Leverage offered

Leverage is a critical component of leveraged Bitcoin trading, where you get to trade cryptocurrencies using borrowed capital. Leverage is expressed as a ratio and denotes how money times the exchange multiplies your capital. Depending on the platform, your initial capital can be multiplied 2x or up to 200x. When reviewing trading sites, we like to check the leverage offered and if it accommodates different types of traders. Exchanges that allow crypto trading with the highest leverage provide better returns, even though they’re riskier.

Account types

The best exchanges accommodate new investors looking to venture into leverage trading. They allow users to open demo accounts to practice trading without any real financial risk. Only when traders are confident in their skills can they switch to real-money trading. We check the type of accounts offered by the Bitcoin leverage trading platform. Is it better suited for newcomers or seasoned traders? 

Deposit and withdrawal limits

When investigating Bitcoin leverage trading platforms, we also look at the deposit and withdrawal limits on offer. Do they impose transaction limits for users? Some exchanges only set limits on unverified accounts. Others impose withdrawal limits on other cryptocurrencies, save for Bitcoin. Then you’ll find exchanges that don’t have any withdrawal limits at all. Such platforms allow investors to claim their profits unrestrictedly, provided all security checks are above board. 

What is Bitcoin leverage trading?

If you’re not entirely sure what the concept of trading Bitcoin with leverage entails, allow us to bring you up to speed. Simply put, Bitcoin leverage trading involves borrowing funds from the exchange to trade cryptocurrency with bigger positions. Put in another way, it allows you to trade more Bitcoin than you would typically be able to due to restricted capital.

Even though it’s popularly known as Bitcoin leverage trading, cryptocurrencies leveraged aren’t limited to Bitcoin. You can also participate in Litecoin or leveraged Ethereum trading. The main reason margin trading Bitcoin is used interchangeably with margin trading is BTC is the most popular cryptocurrency. Its price movement has the strongest impact on the rest of the crypto market.

How does it work?

So, how does leverage crypto trading work? Your first step is to join a trading platform or exchange that allows you to trade Bitcoin on margin. Once you successfully open an account after satisfying the checks and balances, an initial deposit, referred to as a minimum margin, is required. You then apply for a loan from the broker using or leveraging your deposited funds as collateral.

The broker can allow you anything from 1:2 to 1:200, termed the leverage ratio. In the case of a 200:1 leverage ratio, you can trade with a position that’s 200x bigger than your account balance! However, this additional funding will cost you. You’ll have to pay margin maintenance fees which vary depending on the trading platform. Also, you’re charged interest every day.

What risks and benefits come with leverage trading?

Margin trading Bitcoin gives you access to more funds. With more trading funds, you have the opportunity to increase your overall return if the market position moves in your favor. That, by the way, is one of the biggest perks of margin trading. It also helps you diversify your trading portfolio if you’re looking to explore new markets. In addition, it allows you to enhance your trading knowledge by learning new strategies.

But, like with any trading strategy, DeFi leverage crypto trading has its setbacks. If the market position doesn’t move as expected, the results can result in brutal losses. Unlike regular trading, an investor can lose way more than their initial investment.

Bitcoin margin trading vs. regular trading

Leveraged crypto trading is different from basic trading in that you’re using borrowed funds to grow your trading position. As you can imagine, this comes in handy if you have limited capital to work with. With regular trading, also known as crypto spot trading, you can’t trade with borrowed funds. Also, with basic trading, crypto is instantly exchanged between the active market participants trading the coins. And once the buyers and sellers agree on a bid offer, the trade is completed, allowing instant ownership of the crypto to the buyer.

Isolated margin trading vs. cross margin trading

To better understand margin trading, you need to master the concepts of isolated and cross margin trading. Isolated margin trading allows you to limit the risk of a trade by restricting the margin amount at any position. With this approach, if your funds reach liquidation price, you only lose funds on that position.

On the other hand, cross margin trading allows you to spread your asset balance across all open positions in your margin account. This strategy helps prevent complete liquidation since other positions can cushion the loss.

Kraken
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3.8/5
United States of America
Players from United States of America accepted
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Coinbase
2.
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United States of America
Players from United States of America accepted
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Finding your perfect Bitcoin leverage exchange: A quick checklist

Trading Bitcoin with leverage can be frustrating if you sign with the wrong exchange. The ideal start is to pick the perfect broker that meets your unique needs. Use the following guidelines to help you better understand your trading style and refine your selection from our list.

Is the BTC exchange you’re interested in available in your country?

Accessibility isn’t guaranteed on all Bitcoin leverage trading platforms. Not all countries or states permit access to every cryptocurrency exchange. It’s no wonder you get questions like; is crypto margin trading halal? Before you sign with any exchange, check to see if it’s indeed available or permitted in your area of residence.

How long do you wish to hold your margin position?

With leveraged Bitcoin trading, there’s no such thing as long-term investments. It might apply to basic crypto trading, but leverage trading is a whole different ball game. The market is extra volatile, and maintenance fees are higher. As such, trading Bitcoin with leverage is typically considered a short-term investment. The question is: just how short is short? Different exchanges offer varying timeframes ranging from 30 days to a year. Look for the platform that provides the timeline you’re looking for.

Are you a new or seasoned trader?

Different exchanges design different interfaces. Of course, the most intuitive interface will always be a winner. But then again, some of the platforms may be too simple for the advanced trader and lack helpful features. If you’re new to leverage trading, stick to exchanges that offer simple platforms with basic features to help you navigate your journey. Also, look for exchanges with training guides to bring you up to speed with Bitcoin margin trading. If you’re a seasoned trader, opt for the platform with useful features to make your trading worthwhile.

Are you looking to trade in a specific cryptocurrency?

Despite being labeled Bitcoin leverage trading platforms, some BTC exchanges allow investors to trade other cryptocurrencies. If you’re hoping to trade in cryptocurrencies other than BTC, check if the platform offers the currency you’re interested in. The same goes for the available payment methods. Banking methods aren’t standard across the board and differ among trading platforms. If you’re looking to cash out in fiat using a specific banking method, look for an exchange that avails it.

Do you intend to buy and sell crypto on the same platform?

Most Bitcoin leverage trading platforms only allow you to leverage your position by borrowing capital. They don’t allow you to buy and sell crypto. If you’re hoping for a more streamlined approach to your trading, look for the exchange that enables you to purchase BTC on the same platform regardless of margin trading.

Bitcoin leverage and risk management strategies – for top results

It’s important to note that the best Bitcoin leverage trading platform won’t guarantee you the best trading results. Leverage trading remains a risky activity regardless of skill and experience. But you can capitalize on these handy tips to minimize loss where possible.

Start small

If it’s your first day with leveraged Bitcoin trading, why not play it safe and start small? Don’t use high leverages as yet until you find your footing. After gaining considerable experience, you can dive into the deep end of leverage trading. It’s also advisable to divide your positions into small portions to create a ladder of prices. This helps mitigate risk while dialing down the entry price of your position.

Take advantage of take-profit and stop-loss orders

The name says it all. Stop-loss orders stop you from incurring disastrous losses while trading. Setting a fixed stop-loss order closes your trading position the minute it reaches a certain price level. Such a function is helpful if the market moves against you.

Take-profit orders are the opposite of stop-loss orders. These orders automatically close when your profits reach a certain level. As a result, you have the opportunity to secure your profits and avoid losing out if the market trading conditions take a turn for the worst.

Practice responsible trading

Given the volatile nature of leveraged Bitcoin trading, practicing responsible and healthy trading habits goes a long way. Where possible, look for an exchange offering tools like cooling-off periods ad anti-addiction notices. Activate them to stay on top of your trading habits.

In line with practicing responsible trading, be wary of excessive greed while trading. Make sure you set clear and realistic rules for risk management. Ideally, it’s encouraged to risk no more than 3% of your account bank balance. Even so, when setting the trading amounts you’re willing to risk, be mindful that you can lose the funds entirely.

Conclusion – rounding off

The benefits of leveraged Bitcoin trading are clear in that you get to enjoy a low-capital investment that has the potential to yield remarkable profits. But on the other hand, you can’t rule out the possibility of heavy losses. Over and above, ask questions like “is Phemex safe?”, or “is Bybit safe?”. Be deliberate about the exchange you choose, paying extra attention to choosing a platform that suits your trading skills and interest. Compare the pros and cons of each trading platform to help you pick the right exchange for you. Finally, practice extra caution by following a few risk-aversion strategies to minimize loss and make leverage trading work for you.

Bitcoin leverage trading FAQ

💱 What is margin trading?

Crypto trading is a concept that has taken over the world by storm, where investors get to speculate on cryptocurrency price movements and trade to make a profit. But that’s the most basic form of trading. If you wish to take your trading skills to another level, try out margin trading, which is thoroughly detailed in our reviews.

📈 Is leverage trading a worthwhile venture?

Leverage trading is different from conventional trading in that you get to borrow trading funds if your capital is limited. Such a move will naturally amplify your trading funds giving you more trading opportunities. Besides boosting your trading capacity, it also comes with additional advantages listed in our guides.

What risk management strategies can I use when leverage trading?

Leverage trading comes with immense risk. As much as it can be a profitable strategy, it can result in significant losses. While you can’t entirely eliminate the risk of incurring losses, using a few risk-aversion tips explained in our guides can lessen any blow.

🏆 How do I choose the best exchange?

Crypto margin trading is one of the fastest-growing markets worldwide. Several trading platforms show great promise, but not all of them have sincere intentions. Evaluating each platform using the factors listed in our guides can help you pick an upstanding exchange.

💯 Which BTC leverage exchanges are safe?

Is PrimeXBT safe? This question is as critical to this exchange as any other you may want to sign up with. To establish if it’s safe, you must review the platform against a set of performance metrics used by industry experts. If you go through our guides, you’ll find a trusted checklist you can use to ascertain the platform’s safety.

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Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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