Binance announced on Friday (18 October) that its crypto futures platform, Binance Futures, had increased the maximum leverage it allows for its BTC/USDT futures contracts from 20x to 125x.
The first time that Changpeng Zhao (aka "CZ"), Co-Founder and CEO of Binance, publicly made an announcement about Binance Futures was on 2 July 2019 when he said during a presentation at the Asia Blockchain Summit in Taipei that Binance would be "launching a futures platform very soon."
Binance Futures had its official launch on 13 September 2019. At the time, it was only possible to trade BTC/USDT contracts with up to 20X leverage.
Today, just five weeks after Binance Futures officially launched, Binance announced that it had increased the maximum leverage for these futures contracts to 125x and that it had "enabled a leverage adjustment function on its web and testnet trading interfaces" that allows users to choose any amount of leverage from 1x to 125x:
In a press release shared with CryptoGlobe, the exchange said that Binance Futures "uses a unique setup for calculating leverage that enables continuous margin without any jumps, and ‘mark prices’ for preventing unnecessary liquidations and combatting market manipulation."
CZ had this to say:
"Binance Futures offers a fast and stable platform that is designed by traders for traders. We have seen an increase in institutional participation in trading, and these professional traders seek out the most efficient ways to trade very quickly, both in terms of cost and performance. And they are flocking to Binance Futures. Further, the performance of the Binance Futures systems far outstrips many other platforms in the market, giving users a smooth trading experience. The market has been demanding a product with superior stability and performance; now we are providing one.”
Binance also mentions that its Bitcoin futures contracts feature a "built-in hedging tool that helps traders manage risk." And finally, it points out that "traders are ensured with a leading risk management system as well as an ‘insurance fund’ that help to limit the chances of auto-deleverage."
Aaron Gong, Director of Binance Futures, stated:
"We have seen increased activities from these traders transferring in and out from spot to futures during volatile periods. The liquid and easy-to-use spot market, as well as the simple process to transfer capital between spot and futures, provides traders with the most efficient manner to trade in both markets. We’ve seen continued improvement in our volumes and market share, and we expect to see further gains in the coming months. In Q4 of this year, we will roll out new major features that address community feedback, including several developments to improve the user experience.”
CZ said a short time ago on Twitter that novice futures traders should not be using every feature just because it is there:
Use high leverage with extreme caution. Dont recommend it for new traders. https://t.co/vstV0Lusf2— CZ Binance (@cz_binance) October 18, 2019
Not every feature is for everyone. Some features, while not liked by everyone, are in high demand only for small selected groups. Please don’t use features you don’t like or need. As a platform, we have to provide choices to stay competitive.— CZ Binance (@cz_binance) October 18, 2019
And on October 16, CZ tweeted about how well Binance Futures is doing:
That was fast! Sometimes good things happen real fast when you keep building. Kinda like a deja vu from 2017.— CZ Binance (@cz_binance) October 16, 2019
I guess people like the 1 bps fees vs the 7bps. pic.twitter.com/37On81VkBg
Featured Image Courtesy of Binance