Bitfinex has reduced their margin leverage from 2.5X to 1.5X, effective July 21st. Officially, this is because the btc used as margin deposit is also volatile.
That's not entirely true.
This is what will happen starting from July 21st.
1st example
Current BTC price is 600 USD/BTC, and you have a leverage of 2.5:1
If you have 1 BTC, you can open a 1.5 max long or short BTCUSD position
If you have 600 USD, you can open a 2.5 max long or short BTCUSD position
Each dollar you add in your trading wallet will allow you to increase your tradable balance
The leverage will vary depending on the type of collateral.
While this is true I would wager that the vast majority of users are using BTC as collateral and not USD so will most likely apply to most.