Pros and Cons of Crypto Margin Trading

In our last post, we narrated about What is Crypto Margin Trading and Costing of Margin Trade with examples. If you missed our previous post, please check here. In today’s post, we would discuss about Pros and Cons of Crypto Margin Trading.

Cryptocurrency Margin Trading is like availing Home Loan. Just as you can buy a Home worth 50,00,00 with 20% down payment[i.e., 10,00,00] and rest 80% as a loan, similarly in margin trading of cryptos, you can own Bitcoin or Altcoin worth $5000 with just $1000 capital with 5x leverage. The mechanism of holding high worth seems lucrative but has associated risks with it. Let’s take a closer look at the advantages and disadvantages of Crypto Margin Trading.

Pros of Crypto Margin Trading

Margin Trading concept was born in the US and is now accepted widely across the globe. Let’s look at the advantages of cryptocurrency Margin Trading –

Access to High Worth at less Price

One of the most straightforward advantages of margin trade is owning a high worth asset at a lesser price. With Margin Trading a trader could own a digital asset worth of $10,000  by paying $2000 [excludes fees] with 5x leverage.

Larger Gains

If the trader has studied the market proactively and made the right decision to invest in Margin trade, with an upward market trend he can attain profit. Just for example if you have a margin call trade for a digital asset worth $10,000 by paying $5000, if using the leverage of 2:1, you can double your gains.

Cons of Crypto Margin Trading

Every coin has a flip side, so if you thought Cryptocurrency margin trading would only lead to profit and gains, hold on. Margin trading comes with its own set of risk, let’s evaluate –

Borrowing Money To Margin Trade Comes at a price

As a trader, there is no harm in dreaming of owning $1000, $10,000 or even $50,000 worth of bitcoins. With Margin trade it is possible as well, but the initial capital [assuming leverage of 2x] you need to borrow from lenders, you would need to pay interest on that amount. Now, this interest varies from exchange to exchange. Hence when you are calculating your gains, make sure to put in the interest amount you need to pay from your pocket.

Losses Could Be Amplified

Just as we saw gains are multiplied, and a trader could double his profit. Similarly, if the investor has not evaluated all the factors of market risks and cryptocurrency risks, the losses could be augmented.

Risk of Margin Call

Each exchange makes it a mandate for traders to maintain a minimum account balance say for example 25% of the open position. So in cases where the market is sailing in the opposite direction against your predictions, even your balance would fall below the set margin requirement, either you need to add more funds to your account balance to avoid a margin call or else the account would be closed automatically.

To excel in the art of Margin Trading all you need is an in-depth knowledge of cryptocurrency markets and risk management. Margin Trading is a useful investment strategy if applied intelligently could lead to a bigger account balance.

Our next post would talk about different exchanges that allow Crypto Margin Trading. Stay Tuned.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

Poloniex to close Margin Trading for US customers, Delists AMP EXP and GNO Tokens.

After the recent acquisition of Poloniex by Goldman Sachs backed circle, the firm [Poloniex] announced that by year-end it would close access to margin trading for clients from the United States. Releasing the statement Poloniex explained explains that these changes are part of its ongoing commitment to ensure it “complies with regulatory requirements in every jurisdiction.”

Poloniex also mentioned about delisting of digital assets – AMP, EXP and GNO tokens.

Read more at finance magnates


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

Expo, offers traders shorting Ethereum, with Margin Trading

Expo offers traders to practice shorting Ethereum with a mechanism of Margin Trading. An open source platform powered by dYdX protocol has launched the trustless method of creating short and leveraged positions for Ethereum.

Expo functions as a “Short Ethereum” token, which is pegged to a short position on Ethereum. The Short Ethereum token is powered by the dYdX protocol, which, in turn, is built upon the 0x and Ethereum projects.

Liquidity is infused in the Expo system by dYdX lending partners, who can earn interest by securing collateral into smart contracts that could also provide backing for ETH loans. The collateral is automatically sourced from decentralized exchanges. The Expo platform is planning to launch some other margin trading tokens including leveraged tokens

Read more at cryptoslate.com

Three reasons why you should avail a Crypto-backed Loan

Loans are the hard reality of our lives. Car loan, home loan, personal loan and the list could go on and on. While all the loans offered by traditional banks are linked to some specific project, crypto-backed loans differ from that. With crypto lending, one could put in his/her digital currency as collateral and ask for a loan in alternative cryptocurrency or fiat for the project they wish for. So once you have secured your cryptos in the digital wallet with a crypto lending platform, and the loan is released you are free to use it as per your wish for buying a car, or home improvement or even putting stuff in business.

Bitcoin loans or blockchain based loans are ideal for individuals who need instant cash in exchange for their valuable cryptocurrency. Listing down few of the other reasons entities could consider to try out crypto loans.

Reasons To Avail Crypto Loans

Effective Crypto Asset Management

Would you like to just let all your hard earned cryptos go away when you are in need of cash? Well, experts recommend that would be not an effective crypto asset management strategy, but you still need extra money. Crypto-backed loans are the answer, a win-win situation where you can get extra money with a promise that you can have all your cryptos back to your wallet.

Instant release of loan amount

Most of the crypto lending platforms release the loan amount [in fiat] directly to borrowers bank account within 4~24 hrs. The whole loan request to loan release process is automated and digitized, making it quick, simple and effective for borrowers who are in dire need of liquidity.

No implications on your credit score

Do you know in India people having less CIBIL score less than 750 gets rejected by banks on their loan request? This is not valid for crypto-backed loans, and also availing a crypto loan does not affect your credit score. So you are free to take a crypto loan and leave the worries about credit score in the dump.

No Paperwork, no documentation, no processing fees, and no credit scores are needed for a crypto-backed loan. Just a handful of cryptos is all you need.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

Kraken Lists new cryptos ADA and QTUM, Margin Trading, in future

Popular bitcoin and cryptocurrency exchange Kraken, announced today the listing of two new cryptocurrencies, with ADA and QTUM. Trading and funding in the two assets will launch simultaneously.

While Cardano claims to have the world’s first provably secure proof-of-stake consensus mechanism. Quantum runs an “intercompatible” version of EVM (called the “X86 Virtual Machine”) that allows smart contracts to be written in multiple languages.

Users will be able to trade ADA and QTUM on both Kraken.com and its more advanced platform at trade.kraken.com. Margin trading will not be available at launch for ADA or QTUM but may be enabled in the future.

Read more at cryptoninjas.


Nuo is a decentralised and transparent crypto banking platform. It acts as a blockchain powered financial control centre to store, spend, borrow and grow your crypto-currencies. Install the android app or try out our crypto backed loans platform.

If you liked our post, please follow us on twitter [@getnuo] to get latest updates and insights.

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