Nayeem Ahmed

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Nayeem Ahmed
06 de jul. de 2022
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As mentioned above, the use of leverage is allowed in Bitcoin perpetual contracts, that is, you can open/maintain a position greater than X yuan with collateral worth X yuan. With price fluctuations, if the margin (collateral) has been If it falls below the maintenance margin standard, your position will be forced to liquidate: More margin = more collateral = lower leverage = safer from being liquidated Lower margin = less collateral = higher leverage = more dangerous distance from liquidation High leverage can of course allow investors to use less capital to achieve higher profits, but for high leverage investors there is a risk that cannot be ignored - the chain effect of liquidation. For example, if there are many high-leverage positions in many parties today, once the price of Bitcoin perpetual contracts falls, these high-leverage positions can easily be liquidated due to insufficient collateral value. Once many high-leverage positions are liquidated, the price will increase. A sharper drop will snowball all the way down, causing a photo retouching knock-on effect of falling prices and liquidation of a large number of positions. In addition, since the collateral of Bitcoin perpetual contracts can use fiat currency and cryptocurrency, and cryptocurrency itself is a highly volatile asset, it may also happen that some highly leveraged investors use volatile small currency as collateral. , when the perpetual contract itself did not fluctuate much, it was forced to liquidate because the small currency plummeted, making the overall collateral value lower than the minimum margin level. All in all, moderate leverage is indeed an investment tool, but you must also clearly understand the risks behind it and always confirm the margin level! Concept clarification: High funding rates indicate a bear market now, as most investors are long in the futures market? Readers may wish to think about what does a high funding rate mean? When the market is prosperous and the currency price is rising, these capital rates can be imagined as tickets to enter the multi-party market. With the stronger the multi-party power, the higher the ticket fee, the backward investors need to pay more to do this. A multi-party business. From another perspective, since the cost of doing business is very high, the profit must be more abundant than the cost to make investors willing to do this business.
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