{"id":1223,"date":"2021-07-27T09:38:38","date_gmt":"2021-07-27T08:38:38","guid":{"rendered":"https:\/\/tradersofcrypto.com\/news\/?p=1223"},"modified":"2021-07-27T09:38:39","modified_gmt":"2021-07-27T08:38:39","slug":"binance-restricts-leverage-to-de-risk-btc-trading","status":"publish","type":"post","link":"https:\/\/tradersofcrypto.com\/news\/binance-restricts-leverage-to-de-risk-btc-trading\/","title":{"rendered":"Binance Restricts Leverage to De-Risk BTC Trading"},"content":{"rendered":"##\n<p>The <a href=\"\/exchanges\/binance\/\">Binance International exchange<\/a> has turned into one of the important hubs for <a href=\"\/guides\/top-crypto-investing-mistakes-to-avoid\/\">spot and derivative trading<\/a>. But high leverage has led to increased risk, mostly related to risky positions on the direction of BTC prices.\u00a0<\/p>\n\n\n\n<p>The founder and CEO of the Binance Changpeng \u201cCZ\u201d Zhao announced the limitation of leverage for new users, with the intention to apply the new rules to all users. The exchange did not clarify why the limitation was needed, but it may be part of stricter cryptocurrency regulations and consumer protection laws.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">.<a href=\"https:\/\/twitter.com\/binance?ref_src=twsrc%5Etfw\">@binance<\/a> futures started limiting new users to max 20x leverage last Monday, Jul 19th, 7 days ago. (We didn&#39;t want to make this a thingy).<br><br>In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks.<br><br>Stay <a href=\"https:\/\/twitter.com\/hashtag\/SAFU?src=hash&amp;ref_src=twsrc%5Etfw\">#SAFU<\/a>. \ud83d\ude4f<\/p>&mdash; CZ \ud83d\udd36 Binance (@cz_binance) <a href=\"https:\/\/twitter.com\/cz_binance\/status\/1419470491337723909?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Until July 19, Binance allowed up to 125X leverage even for new users, creating significantly risky positions. BTC leverage attracted risk-takers willing to make the best of volatile prices, and a 100X leverage was attractive for the potential to amplify gains.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Did Binance Leverage Help the Recent BTC Spike<\/strong><\/h3>\n\n\n\n<p>Some of the explanations for this week\u2019s hike of <a href=\"\/news\/should-you-be-excited-about-the-recent-crypto-bull-run\/\">BTC above $40,000<\/a> include the accrued leveraged positions on derivatives trading. A rapid upward move will liquidate significant leveraged positions, increasing price volatility.\u00a0<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Huge $600m liquidation of shorts on <a href=\"https:\/\/twitter.com\/binance?ref_src=twsrc%5Etfw\">@binance<\/a>  <a href=\"https:\/\/twitter.com\/hashtag\/BTCUSDT?src=hash&amp;ref_src=twsrc%5Etfw\">#BTCUSDT<\/a> perps. Nuts. Wick to $48k.<a href=\"https:\/\/twitter.com\/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$BTC<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24BTCUSD&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$BTCUSD<\/a> <a href=\"https:\/\/twitter.com\/hashtag\/BTCUSDT?src=hash&amp;ref_src=twsrc%5Etfw\">#BTCUSDT<\/a> <a href=\"https:\/\/t.co\/7M6oWPfCWj\">pic.twitter.com\/7M6oWPfCWj<\/a><\/p>&mdash; Hans Mast (@hansmast) <a href=\"https:\/\/twitter.com\/hansmast\/status\/1419475887972564996?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>In theory, limiting leverage may also limit losses. BTC trading remains extremely risky, and derivatives have raised doubts about deliberate price manipulation to attack both short and long positions.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>BTC Trading Gets Lower Leverage<\/strong><\/h3>\n\n\n\n<p>After reaching peak values in May, BTC market prices slid along with a significant de-leveraging of positions. One of the reasons was the increasingly fearful attitude of traders.&nbsp;<\/p>\n\n\n\n<p>But the other factor was renewed scrutiny of Chinese regulators, which caused most regional exchanges to lower their maximum allowed leverage back in June.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Exclusive: Due to concerns about regulatory policies, China&#39;s largest exchange Huobi recently restricted the leverage of existing users to less than 5x after stopping new users in China from using derivatives. The previous maximum was 125x <a href=\"https:\/\/t.co\/B5MWVJYGzK\">pic.twitter.com\/B5MWVJYGzK<\/a><\/p>&mdash; Wu Blockchain (@WuBlockchain) <a href=\"https:\/\/twitter.com\/WuBlockchain\/status\/1405151941705887748?ref_src=twsrc%5Etfw\">June 16, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Demand for highly leveraged trading allows for significant gains, but also opens new traders to outsized risks.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Good morning <a href=\"https:\/\/twitter.com\/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$BTC<\/a>. <br><br>And a quick reminder why leverage trading, on unregulated exchanges, is a risk. <a href=\"https:\/\/t.co\/1BsnfWM3ez\">pic.twitter.com\/1BsnfWM3ez<\/a><\/p>&mdash; HTL \ud83c\uddf3\ud83c\uddf1 (@htltimor) <a href=\"https:\/\/twitter.com\/htltimor\/status\/1419624088637779971?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>For BTC prices, the lowered leverage positions may mean less volatility and less incentives to attack the positions. Since most BTC markets are unregulated, it is possible to sway the price in a way that creates a short squeeze and leads to 10% daily fluctuations.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can BTC Revisit $40K<\/strong><\/h3>\n\n\n\n<p>The rapid spike of BTC to anomalous prices as high as $48,000 unraveled quickly. After the liquidation of short positions, BTC slid to the $37,000 range again.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\"><a href=\"https:\/\/twitter.com\/search?q=%24btc&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$btc<\/a> Looking great so far\ud83d\udc40!!!<a href=\"https:\/\/twitter.com\/search?q=%24btc&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$btc<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24eth&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$eth<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24ksm&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$ksm<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24dot&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$dot<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24link&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$link<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24luna&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$luna<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24atom&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$atom<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24lrc&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$lrc<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24egld&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$egld<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24fet&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$fet<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24alpha&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$alpha<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24axs&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$axs<\/a><a href=\"https:\/\/twitter.com\/search?q=%24inj&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$inj<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24ltc&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$ltc<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24xlm&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$xlm<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24ren&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$ren<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24tomo&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$tomo<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24hbar&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$hbar<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24enj&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$enj<\/a><a href=\"https:\/\/twitter.com\/search?q=%24uni&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$uni<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24unfi&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$unfi<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24ada&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$ada<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24ftm&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$ftm<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24dent&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$dent<\/a><a href=\"https:\/\/twitter.com\/search?q=%24bnb&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$bnb<\/a> <a href=\"https:\/\/twitter.com\/search?q=%24dego&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$dego<\/a> <a href=\"https:\/\/t.co\/9lAgzLFIWf\">pic.twitter.com\/9lAgzLFIWf<\/a><\/p>&mdash; CryptoNinja (@C_ryptoNinja) <a href=\"https:\/\/twitter.com\/C_ryptoNinja\/status\/1419737894256844805?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Now, the question remains whether the recent rally was mostly due to leveraged trading anomalies, or return to stagnant prices.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Binance Futures Will Evolve<\/strong><\/h3>\n\n\n\n<p>Binance relies on stablecoins to take up leveraged positions in BTC futures trading. But the importance of its native stablecoin, BUSD, keeps growing.&nbsp;<\/p>\n\n\n\n<p>Along with limiting the maximum allowed leverage, Binance will introduce BUSD-based collaterals.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\"><a href=\"https:\/\/twitter.com\/hashtag\/Binance?src=hash&amp;ref_src=twsrc%5Etfw\">#Binance<\/a> Futures Will Launch Multiple <a href=\"https:\/\/twitter.com\/search?q=%24BUSD&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$BUSD<\/a>-Margined Perpetual Contracts with Up to 20X Leverage<br><br>\u27a1\ufe0f <a href=\"https:\/\/t.co\/oLWqPOnjB6\">https:\/\/t.co\/oLWqPOnjB6<\/a> <a href=\"https:\/\/t.co\/7GxnS7AAC6\">pic.twitter.com\/7GxnS7AAC6<\/a><\/p>&mdash; Binance (@binance) <a href=\"https:\/\/twitter.com\/binance\/status\/1419876175896141825?ref_src=twsrc%5Etfw\">July 27, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>BUSD now makes more than 10% of stablecoin market capitalization, and about 7% of trading volumes, as it displaces the importance of Tether (USDT).<\/p>\n\n\n\n<p>The importance of Binance in the crypto ecosystem keeps growing, also boosted by Binance Coin (BNB) positions. The native asset, which can run on two blockchains, manages to keep its price above $300.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Binance Goes Through Ethereum Wallet Prophylactic<\/strong><\/h3>\n\n\n\n<p>To avoid fears and speculations, the Binance exchange has announced its intended maintenance. The temporary closing of ERC-20 wallets is scheduled for noontime GMT and was intended to continue for two hours.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Reminder: <a href=\"https:\/\/twitter.com\/hashtag\/Binance?src=hash&amp;ref_src=twsrc%5Etfw\">#Binance<\/a> will perform wallet maintenance for Ethereum Network (ERC20) starting at 2021-07-27 7:00 AM (UTC). The upgrade will take approximately 2 hours. <a href=\"https:\/\/t.co\/C3l89fOnhl\">https:\/\/t.co\/C3l89fOnhl<\/a><\/p>&mdash; Binance (@binance) <a href=\"https:\/\/twitter.com\/binance\/status\/1419796785392979972?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The maintenance period may limit some important withdrawals, such as ERC-20 stablecoins, including USDT and USDC. However, the limitation is temporary and will not significantly affect trading.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Binance Smart Chain Continues Expansion<\/strong><\/h3>\n\n\n\n<p>One of the chief components of the Binance ecosystem is Binance Smart Chain, the faster and cheaper network that has created a hub for decentralized finance.&nbsp;<\/p>\n\n\n\n<p>BSC is yet to recover its total value locked from the peak in May. But in the past few weeks, the ecosystem of projects and decentralized exchanges shows slow but steady growth in total value locked.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/rx-z8Gv57VXN7YrGU83j9eU0555u6KnqZkimZbf1cZIp1SvNSolc7dxFPDW-ejFWbpxf8G8PuDDhAIRBlYDacWmgppTwo9WGomX8mgUFXz_UM5RvuXc2uWrhpPK9_DykOVd8z7N5\" alt=\"\" \/><\/figure>\n\n\n\n<p>The gross value locked on BSC has fallen toward its baseline value locked of around $14B, compared to nearly $60B locked into Ethereum-based projects.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Binance Smart Chain Fights Potential Exploits<\/strong><\/h3>\n\n\n\n<p>One of the significant problems of Binance Smart Chain are the exploits and rug pulls happening for some of the newly arrived protocols. Decentralized trading on PancakeSwap, the chief decentralized exchange, remains highly risky.&nbsp;<\/p>\n\n\n\n<p>BSC recently launched a $10M bug bounty program for all projects built on top of the protocol.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Launching Priority ONE: $10M Bug Bounty Program for <a href=\"https:\/\/twitter.com\/hashtag\/BSC?src=hash&amp;ref_src=twsrc%5Etfw\">#BSC<\/a>  projects! <br><br>\ud83d\udce2Calling out bounty hunters, ethical hackers, and security experts to take note! <a href=\"https:\/\/t.co\/zcbpYwdyQr\">https:\/\/t.co\/zcbpYwdyQr<\/a> <a href=\"https:\/\/t.co\/dNm0p57jLd\">pic.twitter.com\/dNm0p57jLd<\/a><\/p>&mdash; Binance Smart Chain (@BinanceChain) <a href=\"https:\/\/twitter.com\/BinanceChain\/status\/1419646158457106436?ref_src=twsrc%5Etfw\">July 26, 2021<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Even with audited smart contracts, the risk of exploits remains. The Priority ONE program will mix project curation with a bug bounty fund. Not all startups are eligible, and the program will first take up a batch of 30 distributed apps.&nbsp;<\/p>\n\n\n\n<p>Binance will build a BNB fund that will supplement the bug discovery efforts. The program will apply for startups that already went through at least two security audits from reputable companies, and also put at least $100,000 toward their own bug discovery program.<\/p>\n##","protected":false},"excerpt":{"rendered":"<p>BTC leveraged trading may diminish in the coming months. Binance is limiting new traders to 20X leverage, and will soon restrict all traders to de-risk the platform.<\/p>\n","protected":false},"author":3,"featured_media":1224,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[23,2,12],"class_list":["post-1223","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-binance","tag-bitcoin","tag-btc","entry"],"_links":{"self":[{"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/posts\/1223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/comments?post=1223"}],"version-history":[{"count":0,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/posts\/1223\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/media\/1224"}],"wp:attachment":[{"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/media?parent=1223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/categories?post=1223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradersofcrypto.com\/news\/wp-json\/wp\/v2\/tags?post=1223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}