Cobinhood, New Tokens Added with Margin Trading and Funding

Cobinhood exchange – that charges no fees for trading have planned to add new tokens XRP and NEM to expand the reach of their services. The exchange has also added a benefit of margin trading and funding with Ethereum (ETH), Cobinhood Coin (COB), and Bitcoin (BTC). The announcement was made on Twitter.

The new cryptocurrency trading features would be launched on the platform on October 19th, allowing users to maximize their crypto assets.

Cobinhood recently made cryptocurrency headlines for receiving the Red Dot Award: Communication Design in 2018. They are the first crypto-related business to win this accolade, establishing a historical difference in the industry.

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.

Crypto Margin Trading – Everything you need to know

What are Crypto Wallets and How Crypto Wallets Work?

How could a crypto investor who has a limited amount of cryptocurrency add leverage to his investment portfolio? One of the options that could pay off but is a risky investment is Margin Trading. Margin Trading allows investors to upsurge the amount to be invested without holding the assets. Though it sounds simpler is considered to be a risky strategy and not recommended for everyone.

What is Crypto Margin Trading?

Margin Trading is a concept where the traders are allowed to open a position with leverage. Picking an example would be beneficial here –

Assume you are keen to purchase 1000 shares of XYZ, which are currently trading at $5, so the amount of capital you need is $5000[1000*5]. Now with Margin trading, you can buy a future contract of XYZ by paying 20% margin, that means by investing $1000 you can get exposure to the stock of value $5000.

Leveraging has helped an investor to manage a portfolio worth $5000 with just $1000. Leveraging would also help in making profits if the prices of the stock shoot up.

In crypto world, the concept is similar where Margin Trading is conceivable due to growing interest of cryptocurrency users in the lending market. Funders offer loan to investors, while lenders earn interest on the loan released, the investor uses this money [ in crypto, bond or fiat form] to invest in more significant amounts of coins.

Lets again pick an example –

So you are planning to buy $10,000 worth of Bitcoin

With borrowing 50% Or leveraging 2:1 or 2x

Then you would only need $5000 to purchase a bitcoin worth $10,000.

Globally, we have two types crypto exchanges model, one where customer themselves offer the loan for the margin market and second where exchange itself provides them.

Costing of Crypto Margin Trading

Margin Trading is considered to be a risky investment and hence also serves as a high return strategy. So while leveraging is the best reward earned, it could also turn into bankruptcy risk when there is a steep fall. So as the investor’s chance of gaining more increases at the same rate there is an increase in the risk to lose more. Hence exchange fixes a value called as liquidation value. It is the value where any exchange would automatically close your position so that you do not lose any of the loaned money, and only lose your own money.

Cost of Crypto Margin Trading

The cost of a margin position would include

The interest for the borrowed coins
Fees for opening a position with the exchange

Continuing the same example of borrowing $10,000 worth of bitcoin with 2X leverage you would need $5000, so either you can borrow this money from exchange/lenders that would mean to pay interest and also a fee for opening a position with the exchange.

So total cost of buying a theoretical $10000 worth of bitcoin would be –

= $5000 + interest [ varies from 5% to 50%] + fees

Our next post would talk about the pros and cons of Crypto Margin Trading. Stay tuned.

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October 3, 2018

StellarX -Trade All Assets – Fiat, Crypto, Bonds, Whatever

Co-creator of StellarX Christian says StellaX is for FREE; We aren’t here for a cut. We’re here to redefine how assets move around the world.

While most of the exchanges charge fees on each transaction or use idle funds to invest and get returns. We at StellarX take no fees and, even above that, we refund all network costs, something no other decentralized exchange can match.

How could something be just FREE? Well, Christian stats its just the right match of technology that is helping us do this. Trades and orders are native to Stellar, not a layer that has to be superimposed via relayers and smart contracts. And Stellar’s consensus mechanism requires neither “work” nor “stake” — that is, it doesn’t use your capital to function. Thus, we don’t need your capital to perform either.

Reports state Crypto Trading to increase 50%

Crypto Wallets are the essential part of crypto margin trading

According to ICO advisory firm Satis Group – Crypto trading volume will grow 50% in 2019 and nurture at 9% CAGR [compound annual growth rate] through 2028. This may result in an increase in revenue for — rising as of $2.1 billion last year [2017] to well over $3 billion in 2019. However, to pass the regulatory hurdles as improvement in infrastructure is the need of the hour.

The report stats – While there is mostly a robust market for consumer trading and custody, these products do not always meet the needs of institutional investors, whose solutions must meet higher burdens relative to security and regulatory compliance.