Saad Ullah
Gemini just made a move that XRP and SHIB holders should know about. The exchange announced you can now use XRP, Shiba Inu (SHIB), Dogecoin (DOGE), Solana (SOL), and Bitcoin Cash (BCH) as collateral for derivatives trading.
This is bigger than it sounds. Instead of your crypto sitting idle, you can use it to back leveraged trades. Gemini launched cross-collateral earlier in 2024, but initially only Bitcoin worked. Now they've added five more cryptocurrencies.
The timing's interesting since XRP dropped roughly 10% on July 24. But features like this could create more demand for these tokens.
How XRP and Shiba Inu (SHIB) Cross Collateral Works
Cross collateral is pretty straightforward. When trading derivatives, you need collateral as a security deposit. With cross collateral, you can use multiple cryptocurrencies instead of just stablecoins.
Here's an example: if you have 1,000 DOGE (worth $226), 1 SOL (worth $183), and 10 XRP (worth $31), your collateral pool would be roughly $440. That's what backs your leveraged positions.
The platform automatically calculates your margin asset value based on all your holdings. It's like a credit limit that changes with your portfolio value.
XRP and Shiba Inu (SHIB) Liquidation Risks
Here's the catch: if your trade goes bad, Gemini sells your collateral to cover losses. You could lose all the crypto you put up.
This gets risky with volatile tokens like XRP and SHIB. These can drop fast during sell-offs. That July 24 XRP crash of roughly 10%? If you had XRP as collateral on a losing trade, you could've been liquidated.
SHIB is even more volatile, swinging on social media hype. During crashes, altcoins usually get hit harder than Bitcoin, increasing liquidation risk.
Smart traders diversify their collateral and avoid maximum leverage. Lower leverage means smaller gains but also smaller chances of getting wiped out.
This Gemini update is good for XRP and SHIB utility – more use cases could mean more demand. But understand the risks before jumping in.
Saad Ullah
