Some suspicious looking code has been discovered in Binance’s repository on Github yesterday. According to a Reddit thread, the code is implying that the cryptocurrency exchange is gearing up to support Margin Trading on their platform.
The code in question contains 2 very specific booleans. For all the non-tech-fluent readers out there, a boolean is a function in a code that can determine whether or not that function is active or not. The two booleans have very suspicious names. One is named “isSpotTradingAllowed” and the other is “isMarginTradingAllowed”.
At the moment of writing this article, the “isSpotTradingAllowed” boolean is set to “true”, meaning that it is active. While “isMarginTradingAllowed” is set to “false”, which means it is de-activated. However, the fact that such a boolean exists in the code, means that Binance is indeed gearing up to support Margin trading on their platform. What needs to be discussed is when, and how.
Appealing to a wider market?
Binance’s reasons for offering Margin trading can be discussed forever without coming to a conclusion. Therefore all we can do is speculate on what this means for the Blockchain community.
One thing that we can say for sure is that this is an appeal campaign. Having such a feature on a volatile asset such as cryptocurrencies is a godsend for traders. Applying even a 1:10 leverage on a crypto trade can generate 100% and even 200%.
Furthermore, this is a quick jab at CFD brokers. These brokers were the only ones offering an alternative to cryptocurrencies and quite a lot of traditional financial market traders preferred them for it. The primary reason was the leverage available with Crypto CFDs. With this move, Binance is basically creating such an attractive offer for Crypto CFD brokers that their customers can’t resist it.
Unfortunately, however, the addition of margin trading on Binance will not sit tightly with regulators. In the past, regulations on fintech have always been discussed, but in most cases they were never regarded as securities. The best case scenario was for cryptos to be considered hobbyist assets. But now, after a large exchange like Binance starts offering leverage and margin trading, the attitude will definitely change. Should margin trading be introduced, we may see even stricter regulations on cryptocurrencies. But before that happens, margin trading is going to do nothing but benefit the market.
Why it is good for the market
Many might oversee this factor, but Binance featuring leverage is an amazing opportunity for the crypto market to grow once more.
The reasons are quite simple. Thanks to the leverage, traders will be able to afford larger positions, therefore their profits will be much higher. Thanks to those higher profits they will have more resources to then re-invest in the market. All of it will start growing and growing on top of itself, which will ultimately lead to a new bull market.
But for all of this to happen, the fact that Binance will offer Margin Trading will need to be confirmed by Binance themselves.
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