Kraken is one of the first and prominent crypto exchange that offers margin trading to trade cryptocurrencies. Citing demand, the exchange has gradually expanded its product with a variety of crypto coins and has recently extended margin trading for XRP and BCH.
XRP and BCH could see rising volumes on Kraken
Exchanges usually provide margin trading option only with cryptocurrencies which are in demand and are extremely liquid. Citing the rising demand for XRP and BCH (post forking) in the recent rally, Kraken has announced expanding margin trading option for two coins.
The announcement reveals the leverage amount available and borrowing limits against pairs for both these coins which are as follows:
Leverage amounts available:
- BCH/XBT – 2x
- BCH/USD – 2x, 3x
- BCH/EUR – 2x, 3x
- XRP/XBT – 2x, 3x
- XRP/USD – 2x, 3x, 4x, 5x
- XRP/EUR – 2x, 3x, 4x, 5x
Borrow limits available:
The borrow limits depend on the verification level of a user’s account.
Bitcoin Cash: Tier 1: 1 BCH, Tier 2: 5 BCH, Tier 3: 50 BCH, Tier 4: 500 BCH
Ripple: Tier 1: 5,000 XRP, Tier 2: 25,000 XRP, Tier 3: 250,000 XRP, Tier 4: 2,500,000 XRP
Kraken plans to charge a brokerage of Margin open fee = 0.02% and a Rollover fee = 0.02% / 4 Hrs
This addition expands the company’s margin offering to eight (8) assets, which already includes: Bitcoin (XBT), Ethereum (ETH), Ethereum Classic (ETC), Augur (REP), Monero (XMR), and Tether (USDT).
Margin trading is a double-edged sword, which on one end has the potential of an exponential increase in earnings, while on the other, it is extremely risky. A product for experienced traders, margin trading is often associated with the increase in volumes of a cryptocurrency. It also brings inexperienced traders and an additional line of revenue for the exchanges to earn interest on the money they lend out to margin traders.
Kraken, which anyway is the biggest exchange in terms of EUR volume, may further boost the volumes for XRP and BCH in days to come. Whether one would see these volumes getting converted into positive upticks for coins is something that traders will definitely watch out for.
Will Kraken’s margin trading addition help BCH and XRP prices to rise? Do let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.