Coinbase Scheduled to Temporarily Pause Their Crypto Margin Trading Options
On November 25, 2020, Coinbase will halt all margin trading to compensate for the Commodity Futures Trading Commission’s new rules and guidelines. Starting Wednesday, November 25, Coinbase will end margin trading at 2 P.M. PT and cancel its open orders. As existing positions expire in the last month of 2020, Coinbase analysts predict any margin trading features to cease performing by the start of December. Coinbase recently crashed for the second time, likely caused by XRP’s stunning market gains.
The expiration of margin trading at the San Francisco-based company will put a damper on trading activities that bank on the cryptocurrency’s security. The recent news of the new up and coming margin trading shutdowns has caused a flurry of activity on the crypto exchange market. Several traders find themselves frustrated by Coinbase’s removal of the amplified leverage associated with margin trading on crypto exchanges.
Recent Guidance From CFTC Implements Enforced Action at Coinbase
Traders remain under the false assumption that Coinbase’s recent crashes caused the regulations handed down by the Trading Commission. The rules from the CFTC are not anything new or surprising to crypto trading platforms, but Coinbase just recently started taking notable actions. The regulations’ actual delivery requires Coinbase to relinquish all control over any cryptocurrency traded on the forum. Coinbase has waited right down to the end of the wire to start phasing out crypto margin trading.
In the past, Coinbase has publicly fought against the Trading Commission’s regulations by stating that sellers should be allowed to hold cryptocurrencies. Coinbase isn’t the only exchange platform to propose against the newly implemented exchange regulations. However, the principles gained enough momentum to achieve the majority’s interests during the start of 2020.
How Coinbase Traders are Reacting to the Shutdown of Margin Trading
Crypto margin trading lockdowns on Coinbase have left traders reeling in surprise. Other crypto exchange trading platforms still allow margin trading with crypto assets, but these practices likely won’t last long. Previous crypto margin trade will probably phase out after the positions expire on the majority of popular platforms. After Wednesday, November 21, 2020, Coinbase will suspend all new crypto margin trades, but the forum will honor existing margins until further notice.
The crypto trading giant released announcements on social media that discuss the future’s potential for a cashless economy worldwide. Less than a week before the expected shutdowns, Coinbase servers crashed as XRP prices shot through the roof. On November 16, Coinbase released an official statement on Twitter that linked to remediated and responsive actions taken on behalf of the platform.
The End of an Era Closed With Margin Trading Lockdowns on Coinbase
Coinbase is predicted to face financial impacts as the era of crypto margin trading comes to a close. The exchange platform likely is a chaotic mess as traders scramble to invest in margin trades before the practice is prohibited. Users who once profited significantly for the liquidity of crypto margin trading feel deflated as new trade bans begin to affect Coinbase. Coinbase Pro services also will face profit dips as margin trading starts to shut down once and for all.