Crypto exchange FTX lowers limit on leverage trading to 20X
July 25, 2021, 9:07AM EDT
1 min read
Crypto exchange FTX has lowered its limit on leverage trading from 101X to 20X, according to FTX CEO Sam Bankman-Fried, mainly due to a lack of use.
Bankman-Fried explained on Twitter today that high-leverage trading makes up a small percentage of the exchange's trading volumes and is only used by a small portion of its user base. He pointed out that the average amount of leverage used on the exchange is only around 2X.
"And while we think that many of the arguments [about] high leverage miss the mark, we also don't think it's an important part of the crypto ecosystem, and in some cases it's not a healthy part of it," he said.
Bankman-Fried argued that this is the direction the crypto industry is heading in, claiming his exchange is making the first step.
"Again, this will hit a tiny fraction of activity on the platform, and while many users have expressed that they like having the option, very few use it," he said. "And it's time, we think, to move on from it."
Today the always-on demands of online markets have to be matched with the ability to access opportunities instantly and with no limits. Historically correspondent banks would move large sums of money for those needing to transfer funds while creating bottlenecks of unnecessary friction.
Ethereum had a breakout year in 2021. It’s native asset, ETH’s, market capitalization surpassed $500 billion for the first time. Its network facilitated upwards of $7 trillion value transfer. Non-fungible tokens (NFTs) emerged as another “killer application” that have put its technology on the global stage and caught the attention of the masses.