San Francisco-based crypto exchange Coinbase, which last tried to convince its users that Bitcoin is better than gold, is now pushing another product that’ll make them buy, buy, buy—and potentially lose everything they own.
Coinbase has announced that Coinbase Pro customers can now engage in margin trading. Both Coinbase’s individual and institutional customers can now trade with 3x leverage.
Margin trading is the borrowing of funds from other traders to increase buying power. If you buy some Bitcoin with 3x leverage and sell it for a profit, you’ll make triple the money. You can also lose the same amount, so it’s far riskier.
Coinbase’s 3x margin offering, however, pales in comparison to rival exchanges. Kraken, Huobi, and Poloniex offer 5x margin trading, and BitMex and ByBit offer a heart-thumping 100x leverage on trades.
Coinbase had previously offered margin trading in 2017, but canned the feature after it caused the price of Ethereum to drop from $300 to $0.1. Now, it’s rolling out the service again, but with some major caveats.
Institutional customers must be based in one of 43 US states or nine international countries. Retail customers must be in one of only 23 US states. Customers must also have enough collateral assets in their Coinbase Pro accounts to take part.