tl;dr
Gemini has expanded its cross-collateral options for derivatives trading to include XRP, Shiba Inu (SHIB), Dogecoin (DOGE), Solana (SOL), and Bitcoin Cash (BCH), in addition to Bitcoin (BTC). This allows users to use multiple cryptocurrencies as collateral for leveraged positions, increasing flexibi...
Cryptocurrency trading platform Gemini has expanded its cross-collateral options by allowing users to utilize XRP, Shiba Inu (SHIB), Dogecoin (DOGE), Solana (SOL), and Bitcoin Cash (BCH) as collateral. Previously, only Bitcoin (BTC) could be used as collateral for derivatives trading, which Gemini introduced in early 2024. This move enables traders to leverage a broader range of digital assets when opening and maintaining leveraged positions.
Cross margin trading works by requiring users to deposit collateral to cover potential losses on derivatives positions. Instead of relying solely on stablecoins like USDT, Gemini users can now put multiple cryptocurrencies to work as collateral, transforming idle coins into active assets. The platform calculates the total margin asset value by summing the value of all collateralized tokens. For example, holding 1,000 DOGE, 1 SOL, and 10 XRP could amount to roughly $440, which then supports leveraged trading.
Despite the benefits, cross-collateral trading carries liquidation risks. If the market moves against a trader’s position, the platform may liquidate the collateral, resulting in a total loss of those crypto assets. Tokens such as XRP and SHIB are known for their price volatility, which can lead to rapid value drops during sell-offs. A notable example occurred on July 24, when XRP's price fell by about 10%, amplifying risks for traders using it as collateral.
Given these risks, it is generally advised for traders to diversify their collateral holdings and choose lower leverage levels. This strategy helps mitigate potential losses and reduces the chance of liquidation in highly volatile market conditions, making margin trading safer and more sustainable over the long term.