San Francisco-based crypto exchange Kraken is now offering margin trading, allowing users to leverage their positions by 3:1 relative to assets.
Kraken is the largest marketplace for euro-based crypto trading, and typically ranks in or near the top ten globally in total bitcoin trading volume. The exchange was recently selected by MtGox bankruptcy trustee Nobuaki Kobayashi to assist with the distribution of remaining assets to creditors.
Kraken is requiring creditors proceeding through its process to open an account, hoping that they can further increase traffic on its exchange.
The ratio of 3:1 is fairly standard in the industry, for those offering margin on physical crypto trading (as opposed to synthetic products, for which higher leverage is available). The leverage will come in handy during a period of ultra-low volatility in bitcoin prices, similar to last May, which may be turning off traders once captivated by frequent roller coaster rides.
Leverage will only be available for verified Tier 3 or Tier 4 clients, which have higher funding limits and are required to supply government issued ID.
Kraken will charge a 0.05% fee (2% annualized) for each 24 hours a leveraged position remains open.
Initially, only the BTC/EUR pair will be available for leveraged trading, although USD balances count towards the allowable trade size.