Bitfinex Upgrade Might Bring News for Adrenaline Fans
Major cryptocurrency exchange Bitfinex may launch new crypto derivative products with much higher leverage than what has previously been anticipated, Paolo Ardoino, Chief Technology Officer of the company, hinted.
The tweet posted by Ardoino on Monday was simply a screenshot from what appears to be Bitfinex’s online trading platform, showing leverage set to the maximum of 100. 100 leverage in trading means that 1 dollar invested would allow the trader to buy bitcoin or other crypto derivatives worth 100 dollars by essentially borrowing money from the exchange.
1:100 is considered significant trading leverage, even for much more stable trading instruments like stocks and currencies. With cryptocurrencies, this type of leverage could quickly make the trader large profits, or wipe out an entire trading account, depending on which way the market moves.
Later, Ardoino confirmed that it's going to be "an optional instrument" available to their verified customers only.
We have quite a steep margin requirement enforcement, with position increases. I'm proud of the result and the protections we have. Of course we'll have to learn also from experience.— Paolo Ardoino (@paoloardoino) June 24, 2019
The company recently announced that on June 26, Wednesday, due to an upgrade they’ll be offline for up to seven hours.
“The update will allow for us to continue to deliver a more sophisticated trading experience. This includes, amongst other things, laying the foundation for the launch of alternate trading products on Bitfinex,” the exchange said.
Some members of the community, such as the CEO of Singapore-based investment fund Three Arrows Capital Su Zhu, already anticipated that major changes would be announced by Bitfinex.
Another major exchange, Binance also recently rolled out its own margin trading feature, which only offers the 1:2 leverage and already claimed its first victim, according to CEO Changpeng Zhao.
The token is already ranked 14 in terms of market capitalization, and with a higher burn rate, some speculate that it might overtake Binance’s BNB token, which is currently ranked as the 7th largest coin by market capitalization and is up by 10% in the past month and by 153% in the past 12 months.