Polymarket Offers Crypto Perps With 20 Times Leverage

Prediction market Polymarket has launched perpetual futures contracts that cover 10 cryptocurrencies and offer 20 times leverage to investors.

The 10 cryptocurrencies include Bitcoin (CRYPTO: $BTC), Ethereum (CRYPTO: $ETH) and Hyperliquid (CRYPTO: $HYPE), as well as several smaller digital tokens. 

Users of the new perpetual futures contracts can open either long positions that gain when the cryptocurrency's price rises, or short positions that gain when prices fall. 

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Polymarket has set the highest available leverage at 20 times. Leverage lets a user control a position worth more than the posted collateral. 

At 20 times leverage, each $1 borrowed and traded on margin can provide as much as $20 of exposure to a cryptocurrency such as Bitcoin, magnifying both gains and losses. 

Many analysts and investor advocates warn against trading using leverage as it can blowup a portfolio quickly if a trade runs against someone. 

Polymarket said in a statement that it can liquidate a trade after an adverse move reduces an investor's available collateral.

The prediction market also said that the new perpetual futures contracts offer the "deepest liquidity, lowest fees" to investors. 

Perpetual future contracts differ from traditional future contracts in that they have no scheduled expiry date. 

Prediction markets such as Polymarket let investors bet on the outcome of real-world events such as sports, elections, and even the weather. 

Polymarket is privately held and its stock does not trade on a public exchange.