BitMEX has been a dominator factor for long in the global Bitcoin margin trading market, such that it has reached $12 billion on 12th May 2019, setting a new record. Coinbase and Binance are further looking for the opportunity to enter the market.
Arthur Hayes (@CryptoHayes) twitted on 12th May 2019, “New record for BitMEX trading volume. Praise be to volatility and our wonderful traders!” Previously it has surged in mid-2018 when BitMEX reached 1 million Bitcoin, which is approximately $9 billion. Coinbase Vice President of Business, Data and International Emilie Choi has said that company is considering the addition of a margin trading feature on the platform, but it would require regular checking and clarity from U.S. authorities before enabling it when speaking about The Block’s podcast The Scoop.
New record for BitMEX trading volume. Praise be to volatility and our wonderful traders! pic.twitter.com/iLMGdpz65n
— Arthur Hayes (@CryptoHayes) May 12, 2019
As it is known to us that BitMEX hasn’t allowed U.S. Bitcoin traders to trade on its platform and it is uncertain whether Binance would serve U.S. users with its predicted margin trading platform. CCN tweeted on 24th May 2019, “Binance, in One-Two Punch to Rival Exchanges, Readies Margin Trading.” U.S. can stand a viable market that could remain untouched by other exchanges providing margin trading services if BitMEX and Binance concentrate to do marketing outside the U.S. for their margin trading operations. “We still need to figure that out because there’s not a lot of regulatory clarity there right now in the US. And so that that is being discussed. We couldn’t probably be more differentiated than them in terms of the focus on the fiat to the crypto bridge and being that safe trusted center of the crypto economy. So I think they’re playing one game, we’re playing another.” said Choi.
Now, let us understand about margin trading and why do we need it in more depth. In year 2018, Coinbase generated the total revenue of $520 million, which is much higher than the other exchanges expect South Korea’s UPbit and Binance in the Cryptocurrency market. But in October 2018, company expected the annual revenue of $1.3 million as said in reports of Bloomberg, and $520 million is about 40% of its estimated annual revenue. Cryptocurrency market has surged about $100 billion as the Bitcoin price spiked 135% with the evident rise in interest from institutional and retail investors, in recent months.
Although the Cryptocurrency exchange market has developed its robustness and will see a rise in its volume with the stability in their operations and cash flow, still it needs to mold and adapt them into new market to perform expansion and protected capital to be prepared for any upheaval as seen in 2018. As we read earlier about the Coinbase opening a margin trading platform that is trustworthy, compatible, reliable and crystal clear under the U.S. laws with the endorsement of managers, it brings back the technology into account which has been dumped due to mismanagement in previous years.
Coinbase establishes to expand margin trading operations and run the business smoothly, through the citation of different substitute of Cryptocurrencies and tokens. In 2018, Exchange has secured $300 million in supplementary investment from Tiger Global and it would help the company, in the involvement of more crypto assets and finance the exchange’s Global development.