The word leverage simply means using borrowed money to earn higher profits. Like the real world, you can earn crypto on leverage, giving the users the advantage of investing and earning more even if their capital amount is small. Many crypto exchanges offer a leverage system, and KuCoin is the most popular among them. It provides the user endless opportunities to earn a profit and has the best security features.
More than that, KuCoin offers access to more than 700 coins, and it is the most widely used crypto trading platform worldwide. You can get the latest crypto price such as BTC, ETH, and USDT price in KuCoin, and it also offers quick converters such as ADA/BTC exchange. In this article, we will limit ourselves to discussing the leverage in crypto trading and how you can earn the maximum benefits from it. So let’s get started.
What Is Leverage In Crypto trading?
Leverage is used to increase the investment power of the investor with the help of borrowed funds so that they can earn more and can get more profits. Usually, the traders who do not have initial investment use leverage trading.
To be able to take advantage of leverage, you must have an initial investment that is called capital. Let’s assume you want to invest $1000 in bitcoin but only have the investment of $100. You can choose the leverage of 1:10 from the margin trading option that you must return with interest after a definite time.
Leverage trading In KUCoin?
KuCoin offers the best trading options for all types of trading, and you can also do margin trading at the leverage of up to 1:500. With this feature, you can earn a profit of up to 500 times more than your original capital profit. But you should only use the leverage option when you understand the market and there are high chances of the market going up. If you know when and how to use the leverage, you can earn the maximum rewards significantly higher than your initial investment.
The Risk Of Leverage Crypto Trading
Although it is a profitable technique when used correctly and executed perfectly, you can lose a higher amount if the coin goes down. Let’s assume you take the leverage of 1:10 on $500, and the coin drops by $10. Now, besides the original loss, you also have to pay the extra leverage losses with interest, which would be more than $100.
These are the risks that you should know before investing in leverage trading. There are several other risk-free earning methods in crypto that you can earn without risking much. If you have high capital but do not want to take risks, you can even lend the cryptos for interest.
Leveraging crypto trading is not something you should stay away from, nor is it a technique you should test in every trading. This technique is designed for experienced users who have an idea about the market behavior and want the advantage of a sudden rise or fall in the market.