Leveraged Trading Blamed for Chinese Trader Suicide


Published 1y ago via bitcoinnews.com

Leveraged Trading Blamed for Chinese Trader Suicide
BitcoinNews via bitcoinnews.com

A Bitcoin trader in China has allegedly taken his own life following a disastrous trading loss on a highly leveraged trading position, as reported by Chinese blockchain outlet 8btc. The staggering loss would only have meant 20 Bitcoins without any margin trading — still a significant sum valued at USD 182,000, but nowhere close to the astronomical sum made possible by the 100x leverage.

Leveraged trading in Bitcoin is a means to amplify profits with a small capital, and was popularized by the BitMEX platform, which allows up to 100x leverage. It can multiply profits, but traders often underestimate how quickly positions can liquidate if the market moves in an undesirable direction, particularly with high leverage.

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