Margin Trading On Binance?

News, Opinion | March 22, 2019 By:

Binance has made an adjustment to their general code source on their Github page. The code changes quite often, therefore, the fact that a change occurred was not really notable. However, when developers looked into the new code, they saw that 2 booleans were added into the code. In developer terms, these booleans determine if a feature is activated or de-activated on a platform.

The names of the booleans are as follows: “isSpotTradingAllowed” and “isMarginTradingAllowed”. According to information from Reddit users, one boolean is activated and another de-activated. The “isSpotTradingAllowed” boolean is set to “true” and the “isMarginTradingAllowed” is set to “false”.

This could be a clear indication that Binance is gearing up to offer Margin trading to its customers, but we need to consider how effective it will be. There are very few crypto exchanges out there that offer margin trading to their customers, with high leverages, sometimes 1:100.

If you don’t know what leverage is, it’s basically borrowed money from the company. For example, if Binance were to have a 1:10 leverage and you entered a $100 trade, you’d be trading with $1,000 instead of $100. So 100×10. The more the leverage, the more opportunities you have to grow your trades.

A shot at CFD brokers?

It is already known that margin trading wich cryptocurrencies are usually done on CFD trading platforms. Where cryptos aren’t even the assets you trade with. It’s something that is hard to associate with crypto exchanges.

In the wake of cryptos gaining their old power back, Binance may have noticed a potential gain in offering leverage as the volatility still remains quite high. There will be an equal chance of people either losing extreme amounts of funds or on the contrary, gaining them. Binance will benefit in both scenarios.

This can also be an attempt from Binance to adopt traditional market traders. It has already been proven that transition from trading on MT5 to trading on a cryptocurrency exchange is extremely easy. Furthermore, the fact that Binance will now offer margin trading, makes Crypto CFDs obsolete as leverage was their primary attraction for the traders.

Blessing the crypto community or cursing it?

Leverage is an extremely controversial topic. In my eyes, it is a double-edged sword. No matter how skilled you are at wielding it, it will still cut you at some point. In my case, I’d go with the lowest amount of it, if Binance actually commits to adding it on their platform.

At this point, seeing how cryptos are starting to regain momentum, I believe that it is more of a blessing for the crypto community. The more successful trades occur, the more resources the traders will gain. The more resources they have, the more they can invest further in the market. The more they invest, the more the market grows, you get the picture.

Binance may be able to revive the cryptomarket with this implementation singlehandedly.

This story originally appeared on Forexnewsnow.com