Leverage is well-known for its help in supporting traders beyond their initial funds, but what is the best leverage for crypto beginners to be safe?

If you've reached this post, chances are you've followed all the hype surrounding crypto trading and have finally decided to step foot into the industry yourself. But you should know that there is a lot that you must learn before you can finally start becoming profitable in this market.

Crypto trading is trading one cryptocurrency for another cryptocurrency or a regular currency like the US dollar. One of the most popular crypto trading scenarios occurs between Bitcoin and the US dollar. This is also a great start for beginners in this industry.

Leverage for crypto beginners

 

Using Leverage in Trading

So what exactly is leverage? Let's say you've seen all the recent hype surrounding crypto trading and you really want to get into it. But you realize that doing so is not cheap and can actually put a big dent in your savings, especially if you want to make a big investment.

In the real world, you'd normally take a loan to get something you can't afford. In crypto trading, this loan is called leverage. We really can't explain it any better than to tell you that leverage is basically money borrowed from the broker to perform trading.

If you're wondering how much you can actually borrow from the broker, it really depends on the broker. Some brokers offer smaller leverage while others offer bigger leverage. You should know that most brokers require some sort of proof that you're a decent trader before they allow you access to bigger leverage.

Since crypto beginners are just getting into the industry, they usually aren't ready to make a huge investment until they've explored the market first. There's no better way to do so than to take decent size leverage that you can easily pay back yet still useful to understand the markets.

As a beginner in the crypto industry, you're probably not willing to spend that much in case it all goes sideways. This is why it is best to use leverage on your account so that you can still get the most out of crypto trading without risking too much of your own investment.

If you're a crypto beginner who can only invest about $100 into crypto trading, the best leverage for you is about 100 times your investment. However, if you're a crypto beginner who can invest about $500 into crypto trading, the best leverage for you is around 50 times your investment.

Scenario with this leverage:

Let's use the same example we discussed earlier to further explain how leverage works in crypto trading. If you're a beginner who can only invest about $100 into crypto trading, you probably won't go much far.

With a leverage of 100 times your investment, you'll have access to $10,000 for crypto trading. $10,000 is more than enough for you to have a fighting chance at becoming a successful crypto trader. Though you should be aware that although leverage gives you a better chance of becoming profitable, it also gives you a higher chance of incurring bigger losses.

Nevertheless, you can try trading crypto with leverage in a demo account if you're curious about it. These exchanges specifically allow Bitcoin trading with leverage so you may start your journey from there.