Best Crypto Margin Trading Exchanges for Australia 2022

Crypto trading is becoming more and more popular. As global interest in all different kinds of cryptocurrencies — and particularly in Bitcoin, the oldest and most popular one — is on a constant rise, an ever-increasing number of people turn to crypto trading in one way or another (and with it came the rise of various crypto exchanges in Australia, and globally).

However, it’s not always easy to buy crypto, especially when it comes to the most popular cryptocurrencies whose prices tend to get pretty high in recent times. Bitcoin (BTC), for instance, has maintained a price of several thousand USD and AUD in the past few years. Other popular altcoins — such as Ethereum (ETH), Binance Coin (BNB), Monero (XMR), Ripple’s XRP, Cardano (ADA), and many others — may not be in the same price range, but they still cost significant amounts in fiat currencies.

 Faced with difficulties in purchasing crypto, many enthusiasts find themselves developing different kinds of trading strategies to be able to get hold of some amount of cryptocurrency. One such strategy is crypto margin trading

This article will help you understand what margin trading is, and how it can be applied to crypto markets. If you’re considering this type of trading, we’ll show you some of the best cryptocurrency exchanges for the purpose, the leverage they give you, and how to make the most out of trading with them.

Understanding Crypto Margin Trading

Simply put, margin trade allows you to borrow money from third parties to be able to trade using whatever funds you currently have at your disposal to serve as collateral. Crypto margin trading, therefore, means engaging in cryptocurrency trading by borrowing funds. A crypto margin account makes it possible for crypto traders to obtain significantly larger amounts of money to use as leverage when acquiring cryptocurrencies.

In margin trading, leverage is an important concept because it’s directly related to the ability of traders to purchase more assets than what they currently have funds to pay for. In crypto margin trading, this means that you can get a crypto asset that costs more money than what you currently have, depending on the leverage that the third-party borrower gives you. For instance, if there’s a 1:5 leverage, it means that you can purchase crypto for 5 times the amount of money that you have on your margin trading account.

As a result of trade amplification through leverage, traders can increase their profits but they also might increase their losses if their investments backfire. Because of this, margin trading is usually practiced in markets with lower volatility rates such as the Forex exchange market and the stock market. Although the volatility of cryptocurrency prices can be extremely high, crypto margin trading is still pretty popular with some crypto traders.

In general, margin trading happens through the aid of brokerage, wherein brokers lend money to traders. In the crypto market, however, this is done through a practice known as margin funding, which is when crypto traders are given incentives by a certain platform to lend funds to their peers so that they can engage in margin trading. This means that crypto margin trading provides funding for traders on the basis of peer-to-peer support.

The Best Bitcoin Margin Trading Platforms for 2022

Binance Exchange Logo

Website: binance.com

Country: Global

Fees: 0.1%

1. Binance Exchange

Binance is not only one of the best platforms for crypto margin trading, but it’s also the world’s number one crypto exchange when it comes to popularity and trading volumes. Apart from being a world-renown, trusted, and secure exchange platform, Binance also offers you some of the best liquidity rates as well as high leverage for trading.

With Binance, you get up to 10x in leverage. The exact amount of leverage you can potentially get from this exchange platform depends on the notional value of your position. Binance’s leverage options have ten tiers, providing you with 10x leverage for isolated margin trading. When you trade cross-margin, your master account gets up to 5x leverage, and regular accounts get 3x leverage, as well.

Binance also allows you to pick derivative futures contracts, and you can use several different cryptocurrencies as collateral for it, as well. On Binance, you can trade crypto-to-crypto as well, with more than 500 different cryptocurrencies.

As the most popular exchange in the world, Binance has a reputation it constantly strives to keep, especially in the field of security. Apart from its high liquidity, the security systems of this exchange are some of the world’s best, and it will also provide you with an insurance fund should you choose to trade crypto through it.

What’s more, trading fees with Binance are pretty low, with the exchange charging 0.1% on all types of orders. Therefore, if you’re looking for more competitive fees, Binance is more than a good choice.

On the downside, Binance’s customer support can be somewhat slower to reply when contacted. It’s also not the most anonymous exchange for larger-scale crypto transactions.

BitMEX Logo

Website: bitmex.com

Country: Seychelles

Fees: 0.075%

2. BitMEX Exchange

BitMEX is a crypto trading engine that’s very popular with margin traders. It allows you to trade in futures contracts as well as perpetual contracts, and it supports 8 cryptocurrencies, with a specialization in Bitcoin margin trading — all other cryptos it supports can be traded against Bitcoin.

BitMEX allows for up to 100x leverage for Bitcoin trades. This exchange also gives its users significantly low fees. In fact, maker fees with BitMEX have a negative value — that is, -0.025% to -0.05% — which means they actually give you a rebate if you’re a maker. Taker fees, on the other hand, can vary from 0.075% to 0.25%, depending on order types.

With that in mind, BitMEX’s system can overload during periods of peak activity, making this exchange’s performance somewhat less smooth and unreliable. Perhaps more importantly, BitMEX doesn’t really support fiat currency — trading on this platform is mostly limited to exchanging crypto for crypto. The only crypto-to-fiat trading is between Bitcoin and USD.

Kraken exchange logo

Website: kraken.com

Country: US

Fees: 0.26%

3. Kraken Exchange

One of the oldest regulated crypto exchanges on the market, Kraken, also remains one of the most popular platforms of its kind to this very day. An exchange with great international reach, Kraken offers futures contracts and has solid liquidity to boot, making it ideal for beginners and experienced crypto margin traders alike.

Kraken provides users with some very competitive fees. Position opening fees range from 0.01% to 0.02%, and the same percentage range applies to the extra rollover fees it charges for usage, depending on the cryptocurrencies you trade.

Kraken allows for up to 5x in leverage and lists more than 30 cryptocurrencies for margin trading, including some of the most popular coins such as Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ethereum Classic (ETC), Cardano (ADA), and many more. It also allows you to make deposits in certain fiat currencies — USD, GBP, EUR, CAD, and JPY. 

On the downside, Kraken, as a centralized exchange, obliges its users to undergo multiple KYC (know your customer) and AML (Anti-money laundering) checks. What’s more, it doesn’t offer a lot in terms of crypto trading pairs.

Bybit exchange logo

Website: bybit.com

Country: British Virgin Islands

Fees: Varies

4. ByBit Exchange

The ByBit exchange provides users with an intuitive trading platform and solid user interface. It’s been a well-known platform among crypto margin traders for a while now and is generally praised for its reliability and security.

ByBit offers users leverage ranging anywhere between 1x and 100x, making it a solid choice for leverage trading in crypto. When it comes to fees, makers at ByBit get a rebate of -0.025%, whereas takers pay a fee of 0.075%. 

An important aspect of ByBit’s increased security is liquidation prevention. ByBit is known to go to great lengths to stop liquidation from insufficient liquidity or market manipulation. Because liquidations still do occur, ByBit provides users with an insurance fund. 

In terms of downsides, ByBit is very limited when it comes to crypto support, offering products for only 5 cryptocurrencies. Besides its many advantages, ByBit’s exchange platform is unregulated. On top of that, ByBit still has its users undergo KYC and AML checks.

Poloniex exchange logo

Website: poloniex.com

Country: US

Fees: 0.075%

5. Poloniex Exchange

The Poloniex platform is another popular name in crypto margin trading, being one of the first exchanges to offer this feature on the crypto market. In fact, before BitMEX was launched, Poloniex was the primary platform for crypto margin traders. 

Poloniex offers users leverage of up to 2.5x, as well as a large selection of 16 cryptocurrencies for margin trading. It’s a platform with high liquidity that offers low fees to boot — 0.08% for market makers and 0.2% for takers.

Poloniex has recently scrapped KYC verification, making its verification process significantly faster and less complicated than before. You only need a verified email address to be able to engage in crypto trading, depositing and withdrawing. Interestingly enough, Poloniex offers you higher margin and withdrawal limits if you upload a user photo holding a handwritten sign which spells the platform’s name along with the date when the photo was taken. 

Apart from these advantages, Poloniex has made somewhat of an infamous name for itself because it’s had a history of security issues, even though it appears to be implementing industry level security standards. In 2014, Poloniex was targeted by hackers who managed to steal around $4 million worth of assets. In more recent years, Poloniex also settled charges by the U.S. Securities and Exchange Commission because its digital asset exchange wasn’t registered. Because of this, many crypto traders have a sense of distrust towards Poloniex even though it offers high liquidity and low fees.

PrimeXBT Exchange Logo

Website: primexbt.com

Country: Seychelles

Fees: 0.05%

6. PrimeXBT Exchange

Another exchange praised for its user-friendliness, PrimeXBT lets users customize their interface by moving charts and other elements to suit their needs. This exchange is a solid choice for beginners since it provides them with tutorial videos as well as technical analysis tools. 

PrimeXBT has 50 different leverage options with up to 100x in leverage on trading cryptocurrencies, among other things. Fees are also generally low at this platform, ranging anywhere from 0.01% to 0.05% depending on the cryptocurrency.

On the downside, PrimeBXT doesn’t have a standard order book and accepts only Bitcoin as a deposit. It’s also limited in terms of the amount of crypto it supports — only 5 of the most commonly used cryptocurrencies can be traded at PrimeBXT’s platform.

Deribit exchange logo

Website: deribit.com

Country: UK

Fees: Varies

7. Deribit Exchange

Deribit is another platform that offers crypto derivatives trading as well as margin trading. It boasts an elaborate futures trading engine through which you can trade in Bitcoin futures, as well as Bitcoin options contracts and perpetual contracts. These possibilities are all available to BTC to USD traders, whereas in the case of Ether trading, your options are limited to ETH-USD futures contracts.

This platform is known for its insurance fund that covers potential losses in case your account goes bankrupt by charging winning traders an additional fee of 0.45% for each liquidation. In a way, successful Deribit traders help less successful ones soften the blow of bankruptcy.

Deribit offers leverage of 100x for BTC to USD trading only. In terms of fees, it charges a negative -0.02% to makers and 0.05% to takers in the case of futures contracts, as well as 0.04% for options contracts.

On the downside, Deribit only offers you to trade Bitcoin for a margin and doesn’t allow for altcoin margin trading. It’s also pretty limited in terms of trading instruments for Bitcoin traders.

BaseFEX exchange logo

Website: basefex.com

Country: Hong Kong

Fees: 0.06%

8. BaseFEX Exchange

A somewhat more recent addition to the world of crypto exchanges, the BaseFEX platform is less popular than most of its competitors. It offers a smooth, user-friendly engine to work with, and its trading volumes are constantly on the increase, showing great promise for crypto enthusiasts.

BaseFEX offers comparatively higher leverage rates for margin trading. For most altcoins, BaseFEX’s leverage is at 20x, and in the case of Bitcoin leverage is at 100x, making this platform particularly convenient for margin trading in the world’s most popular cryptocurrency.

BaseFEX doesn’t require that you go through KYC procedures, which means signing up on this platform is simple, fast, and ensures user anonymity. 

This exchange is pretty limited when it comes to depositing possibilities, however — you can only deposit Bitcoin (BTC) and Tether (USDT). It also offers little in terms of trading instruments. You can trade BTC and 5 other coins for US dollars. When it comes to crypto-to-crypto exchanges, you can only swap Bitcoin (BTC) and Ether (ETH) for Tether (USDT).

How Does Crypto Margin Trading Work?

On the other hand, we have a different category of crypto exchanges—DEXs—which are admittedly closer to the original idea for decentralized financing. More particularly, DEXs run on so-called P2P (peer-to-peer) protocols where users “pair” themselves with their trading peers based on the cryptocurrency type, amount, and internal payment preferences.

What’s more, users have full control over their funds and hence, full responsibility for their storage and protection. The exchange doesn’t serve as a regulatory entity to monitor the purchase-sale flow. Instead, DEXs employ self-executing smart contracts to carry out the transaction without any human interference.

As the general public is growing more technically literate, they start noticing the perks of decentralized exchanges in terms of anonymity and liberation from expensive corporate regulators. However, according to the basic rules of consumer psychology, newcomers usually feel intimidated to begin their crypto journey on a trustless and automated service, especially when handling huge amounts of money.

Risk Associated With Crypto Margin Trading

On the other hand, we have a different category of crypto exchanges—DEXs—which are admittedly closer to the original idea for decentralized financing. More particularly, DEXs run on so-called P2P (peer-to-peer) protocols where users “pair” themselves with their trading peers based on the cryptocurrency type, amount, and internal payment preferences.

What’s more, users have full control over their funds and hence, full responsibility for their storage and protection. The exchange doesn’t serve as a regulatory entity to monitor the purchase-sale flow. Instead, DEXs employ self-executing smart contracts to carry out the transaction without any human interference.

As the general public is growing more technically literate, they start noticing the perks of decentralized exchanges in terms of anonymity and liberation from expensive corporate regulators. However, according to the basic rules of consumer psychology, newcomers usually feel intimidated to begin their crypto journey on a trustless and automated service, especially when handling huge amounts of money.

A Few Words Before You Go…

Crypto margin trading can be a risky endeavour. This is because of the nature of margin trading in general, which is a practice that allows traders to borrow funds from third parties in order to be able to buy assets for much higher sums than the initial capital they possess. 

While margin trading is more often used in more stable, predictable markets, the volatile crypto market also finds use for this practice. It’s important to note that crypto margin trading increases potential profits gained by traders, but also potential losses. In case these losses reach the amount of the initial capital deposited as collateral by the crypto trader to the exchange they’re trading through, this exchange will then liquidate their capital altogether.

Because of this, it’s important to create a solid crypto margin trading strategy, as well as to choose the right exchange for the task. In this article, we’ve provided you with an explanation of how the process of crypto margin trading works, as well as a list of exchanges that are most suitable for this kind of trading. Should you choose to engage in crypto margin trading, consider all of the potential risks of this practice carefully, and choose an exchange that will best suit your experience and possibilities.

Frequently Asked Questions

When a third party (such as a crypto exchange) offers you a certain amount of leverage for margin trading, it means they’ll allow you to acquire crypto assets at a price that’s several times higher than your account balance. This also means that your gains or losses from purchasing these crypto assets will be several times higher than usual.

 

For example, if a crypto exchange offers you 10x leverage, you can trade crypto for 10 times the amount you have on your account on this exchange, using your original amount as collateral. Over time, if the value of the crypto asset you bought rises or drops by a certain percentage, your gains or losses will increase ten times the same percentage.

While margin trading is a great way to acquire larger gains with fewer resources, it also carries the risk of disproportionate losses. If the value of the crypto asset you acquired through margin trading drops, the loss will be subtracted from your collateral, and it could even lead to the liquidation of your account.

 

Because of this, margin trading is not recommended for crypto beginners. The practice is more suitable for more seasoned crypto traders that can afford to handle the risks of increased losses.

About The Author

Gareth Johnson
Gareth Johnson

Gareth is incredibly passionate about sharing his knowledge in the crypto industry. It's important to make informed decisions in crypto and it's Crypto Wisdom's goal to make this information widely accessible.

This page was last updated on March 23, 2022