Binance Increases Futures Trading Limits for BFUSD Users Starting December 2024
Binance has announced a significant increase in position limits for futures platform users trading with BFUSD, effective December 17, 2024. This change will apply to all membership tiers, from basic to premium accounts.
The new framework nearly doubles the previous capacity for VIP levels 0 to 9. Entry-level traders will have an expanded limit of 400,000 BFUSD, while top-tier participants can leverage positions up to 8 million BFUSD, increased from the prior ceiling of 5 million.
Binance specified that each master and sub-account will maintain separate position limits for BFUSD, preventing any overlap. Virtual sub-accounts cannot directly purchase BFUSD; users must acquire it through their main accounts and transfer it using a designated command. Users are encouraged to refer to Binance Futures trading rules for real-time updates on maximum position limits. Binance noted:
“The maximum position limit for each master account or sub-account is independent of each other;
To view more real-time changes to the maximum position limit, please refer to the trading rules;
API is not supported for purchasing or redeeming BFUSD;
Virtual sub-accounts cannot purchase BFUSD.
However, users can purchase BFUSD from their main account and transfer it to the virtual sub-account.”
This adjustment by Binance indicates increasing interest in cryptocurrency trading among institutional and retail investors, potentially aiding traders in enhancing profits and refining strategies.
Binance highlighted that while these changes offer new opportunities, adherence to standard risk management principles is essential. The platform remains focused on regulatory compliance and responsible trading practices, urging users to follow relevant laws and regulations in their jurisdictions.
What Is BFUSD?
BFUSD is a reward asset from Binance designed to return eligible balances in futures accounts. It can be used as margin for futures trading within the multi-asset system while also earning rewards. Additionally, BFUSD can be redeemed for USD stablecoins, providing a stable option for crypto traders.
Binance Futures users holding BFUSD receive daily rewards in USD stablecoins based on applicable rates on eligible balances. BFUSD can also be utilized as margin for trading U-margin contracts after multi-asset mode is enabled. However, risks exist when holding BFUSD.
If the funding rate for a short futures position is negative, it may incur costs for the BFUSD hedge portfolio, possibly resulting in no earned rewards. Nonetheless, base and boost rates will always remain positive, with Binance covering funding costs using the BFUSD reserve fund.