Despite the downward trend in the crypto market, giants in the crypto community are never done with a new product or service rollouts. In the wake of Coinbase’ announcement of ‘coinbase learn’, one more massive crypto exchange platform has declared a launch.
Bitfinex, a leading crypto trading platform based in Hong Kong is going to enable margin trading for stablecoin Tether (USDT). It has declared to provide margin trading for the USDT/USD pair. It is aimed to bring more efficient price discovery along with exploring stablecoins. The exchange considers this step as an essential move towards risk management. Also, it will provide users a dedicated lending market.
The announcement by the exchange reads, “Today, adding margin trading on USDT/USD pair will not only allow for more efficient price discovery but in an important move for risk management, unlock the ability to hedge the exposure taken on stablecoins. Along with a dedicated lending market, USDT will be available as collateral for margin positions.”
Here, margin trading means a trading option where the user is able to open a position with leverage, borrowed money that can be used to trade on an exchange. In turn, the exchange will loan coins to users, gaining profit from the interest charged on the borrowed coins. Currently, Bitfinex is offering margin trading only for USDT/USD. It will be adding more stablecoin pairs for margin trading after sufficient liquidity is reached.
Recently, Bitfinex and its spin-off Ethfinex provided support for four new major USD-backed stablecoins, including USDC, True USD (TUSD), Paxos (PAX) and the Gemini dollar (GUSD) on their platforms. All four coins clubbed with Ethereum-backed coin DAI and the industry stalwart, USDT. The platform revealed that all the stable coins would be traded against USD.
In the previous month, the exchange faced scrutiny due to allegations of cryptocurrency market manipulation. The agency specifically investigated whether or not USDT was used to artificially inflate Bitcoin (BTC) prices during last year’s meteoric rise.
Notably, Bitfinex is a cryptocurrency exchange platform established since 2012. The exchange is owned and operated by iFinex Inc. Shockingly, the Hong Kong-based exchange had suffered a hack when it lost about $400,000. Also, In 2016 about $73 million was stolen from its customers’ accounts.