Brokerage accounts are for investing. If you want an adrenaline rush, drink a couple of Four Lokos*.
The volatility of Bitcoin makes the S&P 500 look like a short-term bond. Imagine investing in Bitcoin and thinking “I need 20:1 leverage.”
Evidently, there are people out there doing this with a lot of money. According to data provider Bybt, crypto traders lost $10.1 billion last Sunday to liquidations after Bitcoin fell 17% in 20 minutes.
The Wall Street Journal reported on this story over the weekend.
Offshore crypto-derivatives exchanges offer individual investors high degrees of leverage. At Binance, for instance, investors can get leverage of 125 to 1 for some futures contracts, meaning they can deposit just 80 cents to amass the equivalent of $100 of bitcoin. By comparison, an investor trading bitcoin futures on CME Group Inc., a regulated U.S. exchange, would need to deposit at least $38 and would likely be required to post more margin by their brokerage.