Kraken launches margin trading for Bitcoin Cash and Ripple
Mon, 31 Dec 2018, 05:30 am UTC
Cryptocurrency exchange Kraken has announced the launch of margin trading for Bitcoin Cash (BCH) and Ripple (XRP).
BCH and XRP are the latest additions to Kraken’s margin trading offering which includes Bitcoin (XBT), Ethereum (ETH), Ethereum Classic (ETC), Augur (REP), Monero (XMR), and Tether (USDT).
For BCH, users will now be able to trade BCH/XBT with 2x margin, and BCH/USD and BCH/EUR with 2x or 3x margin. For XRP, Kraken has introduced 2x and 3x margin for XRP/XBT, and 2x, 3x, 4x, or 5x margin for XRP/USD and XRP/EUR. The borrow limits will depend on the verification level of a user's account.
In its official announcement, Kraken clarified:
“Please note that BCH and XRP are not collateral currencies. This means you cannot open margin positions against the value of your BCH or XRP balances. For this reason, you should always maintain adequate balances of other collateral currencies to maintain your margin positions.”
The exchange also cautions users to be careful when trading collateral currencies for BCH or XRP with open margin positions as this will reduce their equity and could lead to the liquidation of their margin positions.
“Margin trading allows you to leverage your account for greater profits, while also assuming greater risk,” Kraken explained.
“While margin trading can lead to greater profits, it can also lead to greater losses. Also, if the losses are large enough, your margin positions can be forcibly closed in order to protect the funds you borrowed to open the positions. This means that you may be forced to take a large loss on a trade rather than having the option to try and wait for a more favorable price.”
Earlier this month, reports suggested that Kraken was considering a private offering and has sent out emails to its high-value clients informing them about the investment opportunity.
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