This PrimeXBT review will show you the good, bad and ugly of this platform. But first, what exactly is PrimeXBT?
It is a Bitcoin-based trading platform that supports derivatives trading. It offers over 30 trading assets, including forex, cryptocurrencies, stock indices, and commodities.
Traders can execute margin trades with their Bitcoin or access traditional financial trading instruments such as NASDAQ or S&P 500 composite indices.
You can also trade in natural gas or crude oil.
This trading platform’s Bitcoin margin trading is, however, the most attractive offering amongst its investors. Bitcoin margin trading is a risky undertaking and could lead to extensive losses.
If you have lost your crypto assets and need help in recovering them, let’s talk (free) here.
What is Bitcoin margin trading?
To begin this PrimeXBT review, we need to establish what Bitcoin margin trading is. Margin trading your assets can compound your holdings in a single trade. Also known as leveraged trading, the trading process allows you to borrow a lender’s crypto assets and trade with them.
Such trades can double or triple your holdings or accelerate their loss when the trade’s execution fails. Bitcoin margin trading meets a specific need in the cryptocurrency market – helping crypto asset holders, also known as HODLers, in making a gain off their assets.
It is a very profitable trading process for digital currency holders who only want to make a few coins on the side, without offloading their crypto holdings.
Bitcoin is the most popular cryptocurrency on earth. It is also very volatile, making it the ideal margin-trading asset.
Margin traders will deposit their Bitcoin holdings on PrimeXBT, and then leverage them as per the platform’s policies.
They will then try to predict the asset’s market movement by examining the asset’s sentimental and technical analysis. A trader can earn a lot of profit if they understand risk management when initiating margin trades.
It is, nevertheless, not a cheap trading process, because all margin traders have to pay high-interest rates on the borrowed assets. Interest charges are withdrawn automatically when a position is closed out.
Bitcoin margin trading on PrimeXBT
PrimeXBT is a relatively young crypto assets trading platform, compared to older platforms such as BitMex or Binance. It was launched in 2018 in Seychelles but only began trading in 2019. The growth trajectory of the platform has been very impressive.
PrimeXBT has clients in as many as 150 countries worldwide and is now recognized as a margin trading heavyweight right alongside BitMex.
Why has PrimeXBT, a questionable broker, grown so popular?
Despite some questionable aspects that we’ll talk about shortly, PrimeXBT has become a go-to crypto assets trading platform for many.
That’s because it has found a way round some of the trading obstacles found in other crypto margin trading platforms. For instance, PrimeXBT advertises as a global exchange because it is not regulated, just like Eightcap and other scam brokers.
While traders from the US cannot trade on it, the platform runs Bitcoin-only trading accounts forming a borderless trading exchange for other users globally. Unlike other regulation-compliant exchanges, PrimeXBT does not conduct any in-depth verification processes or KYC.
The platform does not support fiat. So, it does not have to comply with any localized banking restrictions. The exchange has top-notch platform systems that limit downtimes boosting trading efficiency.
Its fame amongst users also suggests limited difficulties with low liquidity and high trading fees. PrimeXBT offers excellent leverage, high trading volumes, and vast liquidity.
Is PrimeXBT a scam broker?
One sure sign of a scam broker is the presence of high numbers of negative user reviews online. The best place to initiate research on the quality of a broker is on exchange review sites, where users tell of their negative or positive experience with a particular broker.
You can also get genuine reviews on Trustpilot.
Dig for dirt on PrimeXBT, and you will not find much of it, not yet anyway. There are a few complaints about the platform’s lack of trade automation, meaning that traders may miss trades, while the platform keeps netting its profit from fees.
One disappointed user tells PrimeXBT users to be very wary of the platform’s financing fees. Meaning that in the absence of trades, your equity will decline at a very high rate.
According to this user, holding ten times a leveraged margin position on PrimeXBT could cost you at least 10% of your principal amount in a day due to high financing fees.
You, therefore, have to be very careful about your trade’s closing position time to ensure that it does not cross over to the next day. The high overnight financing fee can lead to loss of the user’s principal amounts. This is an exploitative PrimeXBT policy.
Unfortunately, the platform attracts many newbie traders due to its very easy onboarding policy and simple user interface. The less experienced trader might, therefore, assume that the losses come from their lack of trading knowledge.
Why people fall for PrimeXBT’s bait
Like any other questionable broker, PrimeXBT has features that it uses to woo a massive number of people.
PrimeXBT offers leverage rates of up to 100x for trading assets such as Ethereum, Bitcoin, Litecoin, and Ripple.
The platform has a fantastic user interface and is very stable.
PrimeXBT’s trading fees – 0.05% for crypto trades, 0.001% for forex, and 0.01% for commodities and indices – are lower than some of its competitors.
Don’t quickly fall for these. Here’s why:
PrimeXBT is a scam broker
Despite the platform’s seemingly advantageous features, it’s lack of regulatory oversight can ultimately cost its investors their precious savings.
It is true that PrimeXBT has not been hacked and has cold storage facilities for its users’ assets. However, without clear licensing oversight, any trader at PrimeXBT is a sitting duck.
Forex and crypto trading platforms are regulated to protect consumers from the high risks associated with day trading. Watchdogs and regulatory bodies created to oversee brokers and financial markets enforce investor protection regulations and rules.
A regulated broker is licensed to operate within a jurisdiction. In contrast, the unlicensed broker can operate within the same jurisdiction but does not have to play by any asset protection rules.
Benefits of regulated trading platforms
- A regulated broker is forced to display clear risk warnings. In the case of PrimeXBT, the platform would be mandated to communicate right off the bat about their high overnight financing fee.
- The platform has to consent to regular audits. If it is an ECN model platform, its brokers will not manipulate trades.
- The regulator controls leverage to protect the consumer. High leverage can bring high losses. PrimeXBT is not regulated. So, they have the highest leverage rates in the industry.
- A regulated broker is also forced to segregate their operating capital from investor funds. This law ensures that all withdrawals are honored on time and that the broker will refund your capital should they go under.
- Regulated brokers enforce know your customer (KYC) rules to keep money launderers from their platforms. PrimeXBT does not perform any KYC, and while this enhances privacy, it also opens the doors wide to money launderers.
A lack of licensing implies that PrimeXBT is a scam and will eventually lead to investor capital losses. Have you deposited your funds with PrimeXBT? Have you suspiciously lost part of your capital while trading on the platform? We can help you recover your assets. Book a free consultation with us today for professional assistance.