One of the best ways cryptocurrency traders make money is through margin trading, where they can increase the value of their trading account. But, where can you margin trade bitcoin and other cryptocurrencies as a citizen of the United States? In this article, we will talk about crypto leverage trading USA.
As with most other things, a few cryptocurrency exchanges offer margin trading. As such, you should do your research if you’re looking to earn some money in the crypto market. For US traders, this gets even more frustrating. While the whole world is allowed to trade cryptocurrencies with leverage, inhabitants of the USA are not.
There are a few services, but a significant number of them bar US citizens from benefiting from leverage trading. Are there no cryptocurrency exchanges allowing US traders to trade with margins?
First off, we’ll dive deeper into the regulation of margin trading in America. In a nutshell, the whole thing has to do with the strict legislation surrounding derivatives trading in the US. Today, cryptocurrencies remain somewhat of a controversial subject.
For starters, USA regulatory agencies are yet to agree on how best to categorize cryptos. Since 2015, the Commodity Futures Trading Commission (CFTC) has classified cryptocurrencies as a kind of commodity. As such, it doesn’t seem like a good idea for the National Futures Association (NFA) to accept crypto trading, which regulates futures trading on broker platforms in the US. Why? Because cryptocurrencies don’t belong to any particular group of financial products, which are permitted and regulated by these bodies.
In any case, cryptocurrency brokers are not licensed by these institutions. Hence, they can’t legally offer leverage trading to US traders. But wait, there’s more. Cryptocurrency brokerage firms are still permitted to operate in the USA, only as exchange platforms. They allow trading at a smaller leverage of up to 5:1, depending on the currency pair, which seems feasible. This tends to be the case for crypto leverage trading USA brokers.
List of Brokers with Crypto Leverage Trading for US traders
In the end, American traders have a limited number of exchanges to perform cryptocurrency leverage trading on. With that in mind, the list of crypto leverage trading USA platforms available comes down to four exchanges. Each of these exchanges has a reported BTC/USD 24hr trading volume. Moreover, these volumes span from as low as 0.01 BTC to 3000 BTC.
Other brokers who offer leverage trading, such as Liquid (which was formerly Quoinex) are not yet available to US traders. If this were to change in the near future, it could be a game-changer. This would be due to incredibly cheap account funding rates, and zero trading fees charged on fiat to crypto trading.
For the remainder of this article, we’ll dive deeper into the crypto leverage trading at Cobinhood, BitFlyer, Kraken, and CEX.IO. Let’s get started.
Cobinhood has its headquarter in Taipei, Taiwan, and has gained quite a lot of respect in the cryptocurrency world. This next-generation cryptocurrency trading platform also allows American traders to trade crypto with leverage. First off, Cobinhood does not charge traders for trading on the platform, unlike other exchanges. You won’t pay fees for margin trading with as much as 3x leverage.
To get started on Cobinhood, you’ll need to sign up with your email address. Next, you’ll be required to submit necessary documents for KYC verification. The verification process only takes less than 72 hours. Once you have a verified account, or rather a level three Cobinhood account, you can deposit funds into your account and begin trading.
When it comes to withdrawal, your account might be limited to a set amount of funds because of your verification level. For level one, your withdrawal limit is 3 BTC. Level two and three both have withdrawal limits of 100 BTC, but the latter can also use fiat-crypto services. Cobinhood exchange has a mobile app for both Android and iOS, which traders can use to margin trade on the go. The leverage is 3x for the four cryptocurrencies that are available for margin trading, namely ETH, BTC, USDT, and COB (Cobinhood Coin).
Since 2014, bitFlyer has grown to become one of the largest exchanges in the world. Based in Japan, the platform provides three trading pairs, namely; USD, EUR, and JPY. The direct market allows traders to buy and sell ETH, BTC, BCH, LTC, LSK, and MONA.
To create an account, you’ll need either your email address or Facebook account. Once you’ve created the account, you enter the economy class. However, once they verify your information using your phone number, bank account, and personal information, your account gets upgraded.
With regard to margin trading, the rate is set at 100% for 1x leverage. But, for a 15x leverage, the margin rate is set as 6.67%. To trade with margins, bitFlyer provides traders with several APIs, and a mobile app, which is available for download by US-based traders.
Kraken has been at the top of the list of every crypto leverage trader in the USA. Not only does it offer up to 5-times leverage, but also a decent amount of liquidity. Its headquarters are located in San Francisco, USA, which is enough to ensure margin traders of the overall trustworthiness of the broker. In comparison, many other exchanges are based on tax and regulation havens, which can leave you at a disadvantage.
The registration process is simple, where one can use their email address to open an account and get started with KYC verification. This process should take around seven days to complete. When it comes to funding your crypto leverage trading USA account, Kraken allows American traders to deposit funds directly via bank accounts. However, you can’t make a deposit using credit cards.
This cryptocurrency exchange is the largest in terms of EUR volumes. Hence, as soon as the account details have been verified, the trader can begin to deal with multiple fiat currencies such as USD, EUR, GBP, CAD, and more, with suitable liquidity.
Furthermore, traders can benefit from the multiple leverage options available. These options vary from one trading pair to another. So, while a BTCUSD or BTCEUR pair has an available margin of 2x, 3x, 4x, and 5x, the ETCUSD or ETCEUR pair only has a leverage option of 2x.
Established in 2013, CEX.IO has its headquarters in the United Kingdom but has offices in the USA. It offers traders an opportunity to trade across several platforms, including web-based engines, mobile app, WebSocket, and REST API. As mentioned, traders can deposit funds into their CEX.IO accounts using their credit cards, in USD.
Before going any further, be aware CEX.IO is not operational in all US states. Namely, these are Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Nebraska, New Hampshire, New Jersey, North Carolina, North Dakota, Ohio, Oregon, Tennessee, Texas, Vermont, and Virginia.
CEX.IO offers traders margins up to 3x, and this is sufficient to make crypto leverage trading in the USA profitable. Experienced traders can use advance CEX.IO trading engine. There, you’ll be able to enjoy all the features necessary to make a decent earning from the market. For instance, traders can use features such as market and limit orders.
You also have access to a mobile app and multiple other APIs to use for cross-platform trading. CEX.IO also supplies traders with advanced reporting on margin trading. Moreover, experienced traders can use a range of tools, including order types, technical analysis, and other trading tools.
Cryptocurrency margin trading is suitable for making a living, but they are mostly not available to USA traders. Overall, Kraken is the best option for Crypto leverage trading USA. Also, CEX.IO offers USA traders an excellent opportunity to margin trade cryptocurrencies. However, be wary of poor trading engine performance during high volume time for Kraken, and high fees for CEX.IO. And remember: CEX.IO is only available in 25 states in America, but Kraken is available across the country.
Beyond that, CEX.IO is more flexible with deposit options, allowing traders to deposit using credit cards. Kraken, on the other hand, doesn’t support credit card deposits but allows direct bank transfers. Both Kraken and CEX.IO offer extra security features that secure traders funds from hackers’ attacks. Also, both firms have headquarters in regulated countries as compared to other exchanges, which are based on tax and regulation havens.
At the beginning of this article, we talked about the reasons why margin trading and leverage exchanges are barred from operating in the USA. While Kraken and CEX.IO have found a way to go around these barriers, they are no real substitutes to professional margin brokers such as BitMex or PrimeXBT. In any case, Kraken and CEX.IO have the functionality of simple exchanges. There are no advanced orders, and they only offer slight leverage effects on some currency pairs.
With regard to Cobinhood, the firm reportedly filed for bankruptcy and is supposedly exiting the market. The situation isn’t that well off for bitFlyer either. BitFlyer recently suspended new account openings, before restoring the process.