Click to Skip Ad
Closing in...
  1. Mattress Topper Amazon
    14:52 Deals

    35,000 Amazon shoppers gave this mattress topper 5 stars – get one for $34 today

  2. Amazon Echo Auto Price
    13:16 Deals

    Add hands-free Alexa to your car for $19.99 with this Amazon deal

  3. Amazon Deals
    07:55 Deals

    10 deals you don’t want to miss on Saturday: Alexa in your car for $19.99, $200 Chro…

  4. MacBook Pro 2021 Price
    16:34 Deals

    Amazon slashed $200 off Apple’s M1 MacBook Pro, or get a MacBook Air for $899

  5. Amazon Gift Card Promotion
    11:46 Deals

    How you can get $15 from Amazon right now for free




Startup gets funding to bring high-risk margin trades to Bitcoin

April 9th, 2013 at 11:45 PM
Bitcoin Margin Trading

If you thought the Bitcoin market was crazy before, just wait until traders get the ability to make leveraged bets on the virtual currency’s future price. From the what-could-possibly-go-wrong department, TechCrunch reports that New York-based startup Coinsetter has received $500,000 in seed funding to set up a Bitcoin trading platform that will allow for high-risk margin trades and short selling of Bitcoins. Coinsetter co-founder Jaron Lukasiewicz tells TechCrunch that the ability to make leveraged trades is vital to every major financial market and that giving owners the ability to trade Bitcoins in this way will help the virtual currency establish itself as a legitimate alternative to government-issued money.

Margin trades, for those who aren’t up on finance terminology, involve borrowing money from an outside source to buy an asset. The advantage of margin trades is that you can potentially reap larger rewards if an asset’s value increases because you’ll be able to buy more of the asset using someone else’s money. The downside of margin trades, of course, is that if the value of the asset goes south then you won’t only lose the money you invested but you’ll still have to pay back the party you borrowed money from along with interest.

Adding margin trades to the Bitcoin market will certainly be interesting since it will potentially be adding a lot more leverage to a market that many investors already believe is a bubble. Let’s put it this way: If someone offers to sell you synthetic Bitcoin swaps over the next few months, you probably shouldn’t take them up on it unless you have a lot of spare cash to blow.




Popular News