Trading Bitcoin with 100x Leverage??

So PrimeXBT is a relatively new trading platform for crypto. One of their selling features is they offer upto 1:100 leverage on trading. While some traders might look at that and see $$ signs, I'm not entirely sure it's such a great idea.

Firstly, let's look at the upside. If you opened a short trading position when Bitcoin was near its peak at $20k, 1 Bitcoin in size. And then sold that short position when Bitcoin dropped to $3k, you would have made around $16-17k profit. If you had opened that same position but used leverage of 1:100 than you would have made a cool $1.6 million. So with just one trade you would be set for life.

But obviously there is a downside. If you had opened that same position and the price moved 1% in the wrong direction, you would have lost all your investment. With leverage of 100x you need a lot of margin to support an open trade. Bitcoin tends to move around a lot. Easily more than 1% on most days.

While using 100x leverage may seem like a shortcut to incredible wealth, chances are you're not rich enough to be able support such a position. Use smaller amounts of leverage or use no leverage at all!! There is still enough price movement in Bitcoin to profit without using such extreme leverage.

So just because you can open insanely leveraged positions on PrimeXBT, it's probably not a great idea (unless you've got some insane whale like insight and are willing to bet the house on an uber trade). Leverage is sliding on PrimeXBT - use low leverage!