We have increased our selection of margin, futures and Flexline collateral currencies to now include HYPE and XAUT.
We’re committed to providing traders with greater flexibility and control, and are excited to announce a significant expansion in our collateral opportunities for Kraken Pro traders.
With this update, the number of collateral currencies you can use for margin, derivatives and Flexline trading has increased to 56.
What is a collateral currency?
A collateral currency is a fiat currency, crypto, or stablecoin you can use to secure your positions across Kraken’s leveraged and credit products — including Margin trading, Derivatives, and Flexline. The same shared collateral pool powers all three, giving you maximum optionality across the platform with a single set of eligible assets.
How collateral works across products
While the collateral pool is shared, each product uses it differently:
| Product | How collateral is used |
| Margin | Your collateral secures borrowed funds from Kraken’s margin pool, allowing you to go long or short on any margin-enabled trading pair. Your collateral does not need to match the trading pair of the order book you’re trading on. |
| Derivatives | Collateral is used to meet initial and maintenance margin requirements on futures and perpetual contracts. It backs your open positions and covers any mark-to-market losses. |
| Flexline | Your collateral secures a credit line, giving you access to funds without needing to sell your assets — preserving your holdings while unlocking liquidity. |
Note: Both unstaked and Kraken Rewards assets can be used as margin collateral. However, assets held in Kraken Pro on-chain staking are ineligible to use as margin collateral.
Maximizing the benefits of leveraged trading
Expanding the range of collateral currencies empowers traders in several ways:
Tax advantages: In some jurisdictions, using digital assets as collateral rather than selling them outright can defer taxable events. By leveraging collateral currencies for margin trading, traders can potentially reduce immediate tax liabilities while maintaining exposure to their holdings.
Diversification of collateral: By using multiple collateral currencies, you can better manage risk and reduce exposure to volatility in any single asset. This is particularly valuable for traders seeking to safeguard their positions in unpredictable markets.
Improved liquidity: With more assets eligible as collateral, you can free up funds for other trading opportunities while maintaining robust positions on margin. This ensures your portfolio remains active and responsive to market changes.
Strategic flexibility: The ability to combine assets with different haircuts enables fine-tuned margin strategies tailored to your risk tolerance and market outlook. Whether you prefer conservative or aggressive trading, expanded collateral options provide the adaptability you need.
Hedging and short selling opportunities: With access to Margin and Derivatives alongside a diverse collateral pool, traders can hedge their existing positions or take advantage of downward market movements through short selling. This opens up opportunities for profit regardless of market direction.
Leverage and capital efficiency: Leveraged products can amplify your buying power, allowing you to take larger positions than your available capital. This capital efficiency is further enhanced by the ability to use a broader range of collateral currencies, enabling you to maximize potential returns while optimizing resource allocation.
New collateral currency choice
Here are the new assets being added to Kraken’s collateral lineup, bringing the total to 56 options.
| Asset | Haircut |
| Hyperliquid (HYPE) | 20% |
| Tether Gold (XAUT) | 40% |
Understanding haircuts
When using a currency as collateral, Kraken applies a “haircut” to determine its effective value. This haircut reflects the percentage reduction applied to the asset’s value to account for potential price volatility.
For example, if you hold $1,000 worth of an asset with a 20% haircut, its collateral value is calculated at $800. This approach ensures greater stability and reduces the risk associated with using volatile assets as margin collateral.
What to keep in mind
It’s important to note that collateral assets used to open margin positions cannot be exchanged for other currencies or withdrawn while the position is open. These assets remain reserved as collateral and are visible in your account balance, but they are restricted from trading or withdrawals. You can check the availability of your collateral assets at any time through the Funding tab in your Kraken account.
Ready to trade but don’t have a Kraken account yet? Sign up today!
Availability of margin trading services is subject to certain limitations and eligibility criteria. Trading using margin involves an element of risk and may not be suitable for everyone. Read Kraken’s Margin Disclosure Statement to learn more.
Trading derivatives and other financial instruments, including leveraged financial instruments, involves significant risks and is not appropriate for all investors. See our Risk Disclosure to learn more.
Using Kraken Flexline involves risk, may have tax implications, and may result in the loss of capital. Borrowed assets subject to withdrawal limits. Availability of Kraken Flexline is subject to certain limitations and eligibility criteria. This page is for informational purposes only and is not a recommendation to use Kraken Flexline. See Kraken Flexline terms at www.kraken.com/legal.
