After 3 Years, Coinbase Just Rolled Out Margin Trading Again

Roughly three years after ending support for margin trading, leading United States-based cryptocurrency exchange, Coinbase has reintroduced the service according to a Wednesday announcement.

Starting from Wednesday, customers in 23 U.S states using Coinbase Pro can trade with as much as 3x leverage, with the service also available to institutional traders using the platform in 45 U.S states and nine international countries.

Margin trading is a trading feature that allows traders to borrow money from the exchange platform to augment their existing trading balance with the hope of earning a bigger profit on their open positions.

Notably, though, this isn’t the first time that Coinbase has rolled out margin trading. Back in 2017, the exchange had offered the service until when a sudden price blip dragged the value of ETH on the platform from $300 to as low as $0.3.

However, following the reintroduction, a spokesman disclosed that Coinbase has taken enough measures to make their new margin trading service more robust. Among other things, the exchange has collaborated with regulators and also launched a division that will handle liquidation on margin positions.

Meanwhile, although the Coinbase launch of 3x leverage for traders is likely to increase the platform’s dwindling market share of trading volume, it is relatively small when compared to what is offered on other offshore exchanges like Binance and BitMEX.

For instance, Coinfomania reported earlier this month that BitMEX rolled out XRP/USD perpetual contract with 50x leverage, albeit offering up to 100x leverage on other derivative products. Similarly, OceanEX launched trading for the world’s first VeChain perpetual contract with 5x leverage.