Crypto Traders Warn Newbies About New & Super Risky Binance Feature
The most recent confirmation that major cryptocurrency exchange Binance will be rolling out its margin trading feature "soon" left the cryptoverse abuzz with warnings that new traders should stay away from this very risky instrument.
Binance CEO, Changpeng Zhao, hinted about the new feature by posting a screenshot of their upgraded website today, while later the company confirmed to TechCrunch that the margin trading is coming "soon." According to the report, it has already been beta tested among selected users.
A warning in the screenshot reminds that “Margin trading confers a higher profit potential than traditional trading, but also greater risks. Please be aware that in the case of extreme market volatility, there is even a risk that your assets may be liquidated.”
Crypto exchanges such as Coinbase Pro, Kraken, OKEx, Bitfinex and others already offer margin trading services.
Margin trading is a big thing as it allows traders to trade by using borrowed funds, thus being able to purchase more. Essentially, the traders are in debt, which is risky. It can reap great rewards, or lead to financial ruin.
So it's no wonder that crypto traders warn newbies to be extra careful with this instrument:
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Interestingly, just yesterday, crypto trader @TraderEscobar mentioned Binance’s margin trading feature, and CZ replied with a simple “careful what you wish for.”
While Binance has included margin trading in the Feature Rollout section of their white paper, rumors of the upcoming feature allegedly first started two months ago. The CEO himself also mentioned that the feature is coming during a livestream following the hack earlier this month.
Meanwhile, binance coin (BNB), the native token of the exchange, is up by 10% in the past 24 hours (13:35 UTC) and by 36% in the past week.
BNB price chart:
