In the cryptocurrency contract market, the choice of leverage often represents the dividing line between getting rich and facing liquidation. Some use 2x leverage for steady profits, while others rely on 50x leverage for short-term arbitrage, and there are even more aggressive traders who chase 500x ultra-high leverage, hoping to achieve greatness in one battle. However, behind different leverage levels lie vastly different risk levels and survival probabilities. The so-called choice of 'a moment's thought' is, in fact, the ultimate test of risk awareness.
Low leverage (2-5x) is typically seen as a conservative choice, suitable for novices with low risk tolerance and lacking trading experience. At this leverage level, capital efficiency and profit amplification effects are not significant, but the trigger distance for forced liquidation is relatively far, allowing investors more room for adjustment. For example, using 1000 USDT as the principal for 2x leveraged trading, the price must drop by 20% to reach the margin warning line, giving investors ample time to cut losses and exit, preventing instant capital loss. For ordinary investors, low leverage may allow them to enjoy market fluctuations to some extent while keeping risks within a manageable range.
Medium leverage (10-20 times) is the conventional choice for mature traders, requiring solid trading skills and strict risk control capabilities. In trading mainstream assets with good liquidity, such as Bitcoin and Ethereum, medium leverage can achieve a relative balance between risk and return, suitable for capturing medium to short-term market trends. However, even this "moderate" leverage carries hidden dangers. When unexpected negative news arises in the market, such as tightening regulatory policies or major sell-offs, the coin price may experience fluctuations of over 10% in a short period. Under 10x leverage, such fluctuations can double the loss of the principal or lead to direct liquidation. In the Bitcoin flash crash event in April 2025, many investors using medium leverage were forced to liquidate, and profits instantly vanished.
High leverage (50-500 times) is the "exclusive tool" of professional traders, and it can even be described as a "death game." A 500x leverage means that a tiny fluctuation of 0.2% in the coin price is enough to trigger a forced liquidation, leaving almost no room for error. This level of leverage is only suitable for capturing small price differences in low-volatility markets or for rapid operations with extremely high confidence in short-term market events. However, in a cryptocurrency market where the average daily volatility often exceeds 5%, high leverage is tantamount to suicide. Some traders have attempted to use 100x leverage to capture a 0.5% fluctuation in Bitcoin, only to see their 100,000 yuan principal wiped out in 30 seconds due to an instant reverse fluctuation in the market, without even the opportunity to add margin.
Leverage itself is a neutral financial tool, but in the irrational market environment of the cryptocurrency space, it has become a "wealth harvester." Most investors often overestimate their risk tolerance and trading skills, blindly pursuing the extremely high returns brought by high leverage while ignoring the risk amplification effect behind leverage. The moment you choose the leverage multiple, the outcome is predetermined: will you respect the risk and choose low leverage to proceed steadily, or will you be driven by greed to engage in high-leverage gambling? The divide between getting rich and facing liquidation lies in this one thought. Countless cases have long proven that high leverage, detached from risk control, will ultimately lead only to liquidation.
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