Explaining leverage and how scary, and profitable, it can be

A lot of people on this sub know about leverage and how bad it is for new investors, I'm not going to outright shame anyone for using 2x or 3x leverage, but I am going to give some statistics that may sway people to, or away from leverage investing.

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I went ahead and made this easy, 2/19/21 I bought 1btc, I then leveraged it 1x, 10x, and 100x. (in real life I seriously doubt any credible place will give you 100x leverage ever, most places don't even do 30x anymore)

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basically with this leverage, you have 30k~, but you have the buying power of 300k, or 3 million.

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let's look at the statistics for this scenario we made up.

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1,10,100x leverage visual

with the buying power of 30k, with 100x leverage currently, you would be at a net gain of nearly a million dollars.. that's pretty cool, right? ok but you also just bought in at the best time when bitcoin was rallying insanely.

but what if you bought at the top of the bull run? like an epic Redditor

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value of 1 btc bought at 5/11/21 - 5/26/21. 1x leverage, 10x, 100x

you will be liquidated if you lose the amount of money you had as collateral, or 2x of it. so if you had 50k, and you lose 100k, you would first off lose the initial 50k you had, and you would owe 50k more, plus any other liquidation fees.

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1x,10x,100x leverage

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In this instance, with 10x leverage, you would be liquidated in about 4-5 days. With 100x leverage, less than a day. it's not even on the graph.

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leverage can be a nice tool for someone who truly knows shit about their investments. But the risks involved are so insane that if you do end up leverage trading it should most likely be only for 2-3x leverage, or you risk being liquidated too early before a massive bull run. This sub often defends new investors from making risky plays like day trading, investing in shitcoins, or leveraging, and I would say in this case it's fair to look at the negatives and point them out.