San Francisco headquartered cryptocurrency wallet and exchange Coinbase has added margin trading on GDAX, its institutional digital asset exchange. Margin trading has been made available for eligible clients of GDAX, who can now trade up to 3x leveraged orders on its BTC, ETH, and LTC order books.
Adam White, Head of GDAX, explained the rationale for the move: “Over the last few years, we have seen growing interest from institutions that desire advanced trading features. We are excited to launch a margin feature that meets the high demands of professional traders while addressing federal and state regulatory requirements. We believe this feature will attract a new wave of institutional clients, ultimately reducing volatility and supporting growth of the digital asset industry.”
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As the company is US-regulated, clients must be approved as Eligible Contract Participants in order to have access to margin on GDAX. For that they need to meet one of several criteria. These ensure that only big players can access the service, with requirements such as being a corporation with a net worth exceeding $1,000,000 or total assets exceeding $10,000,000.
Also eligible can be: individuals with amounts invested on a discretionary basis, the aggregate of which are in excess of $10,000,000; commodity pools that have total assets exceeding $5,000,000; regulated insurance companies; investment banks; brokers; dealers; and futures commission merchants.