Binance Raises Leverage to 125x for Release of Bitcoin-Tether Futures

Binance’s futures exchange is increasing leverage to 125x with the introduction of bitcoin (BTC)/tether (USDT) contracts today. 

The cryptocurrency exchange initially reported its futures platform toward the beginning of July, at the time suggesting it would permit 20x leverage. Presently, futures traders would now be able to select leveraged positions in the range of 1x and 125x, it said October 18.

“We have seen an increase in institutional participation in trading … And they are flocking to Binance Futures,” said Changpeng “CZ” Zhao, CEO of Binance, in a statement. “The market has been demanding a product with superior stability and performance; now we are providing one.”

Max leverage positions on Binance presently surpass crypto exchange BitMEX‘s futures leverage positions, which top off at 100x for certain contracts.

Renowned economist and cryptocurrency skeptic Nouriel Roubini has recently contended that, in giving such high leverage, exchanges are exposing traders to an excess of hazard.

Binance stated that its BTC futures contract provides a built-in hedging tool to assist traders in dealing with that risk. Further, the exchange stated it’s giving an “insurance fund” that “helps to limit the chances of auto-deleverage.”

The statement comes in the midst of tightening competition in the bitcoin futures space. Intercontinental Exchange’s Bakkt bitcoin futures exchange was introduced last month. Despite the fact that the exchange’s initial volume frustrated critics, the exchange has just facilitated its first block trade for two institutional investors.