Binance’s margin trading has claimed its first victim. The cryptocurrency of a trader with a short position on bitcoin (BTC) was liquidated after bitcoin rose sharply in a short period of time.
Margin trading allows users to trade with borrowed money on the exchange. That can lead to more profit, but it also entails more risk. Cryptocurrency exchanges such as BitMEX and Kraken also offer the possibility for margin trading.
The option to trade margin was announced in May this year. A select number of traders are now part of a large-scale test. And now the first victim has fallen as a result of this often risky way of investing.
The CEO of the cryptocurrency exchange, Changpeng Zhao, took advantage of the event to warn:
We had our first Margin liquidation today. And guess what, it was a #BTC short position.
Don’t bet against bitcoin, and don’t bet against b…
We had our first Margin liquidation today. Guess what, it was on a #BTC short.
Don & # 039; t bet against bitcoin, and don & # 039; t bet again b…
– CZ Binance (@cz_binance) June 24, 2019
It is not entirely clear what Zhao means by the last letter “b”. It is thought that he is referring to Binance Coin (BNB), the native cryptocurrency of the Binance ecosystem.
BNB has been doing exceptionally well for months. Investors who bought the altcoin early this year now enjoy a return of more than 500%. The growth is mainly the result of the continued expansion of Binance, such as the possibility to trade margin.