Just some days back, the United Kingdom authorities restricted Binance from carrying out regulated activities. And this has gone viral all over the internet.
On this note, Micheal van de Poppe—the popular technical analyst—has said that the real issue should be the extremely high amounts of leverage on those exchange platforms which are sometimes up to 125x.
He quipped that these extremely high leverage amounts should be banned in all countries because it profits only the exchange platforms at the end of the day.
He said, “UK banning #crypto exchange Binance, seems to be the news. What actually should be banned in all countries, is the insane amount of leverage (up to 125x) on those exchanges. In the end, it only helps the exchange in making money. And 99% shouldn’t use it.”
Leverage is the technique of utilizing borrowed money to maximize the possibility of a future trade’s success. Beyond what you have in your account, leverage helps you to open more positions.
When trading Binance futures, traders can leverage between 1% to 125%. The notional value of each trader’s position determines the maximum level of leverage. Thus, the larger the positions, the lower the available leverage.
Regarding this, some traders vehemently disagree with Michael’s while others affirmed the truism of his statements.