Leverage in crypto: how to turn $100 into $1000 ( or lose everything )

In crypto trading, there is one magical tool that lures newcomers like a moth to a flame — leverage. It sounds simple: the exchange gives you money, you trade with a larger amount, and you take home more profit. In theory. In practice, it’s the hunting rifle that you hold by the barrel.

How it actually works

Imagine: you have $100. You want to trade BTC with 10x leverage. The exchange lends you $900, and now you control $1000. Did the price rise by 5%? Your profit is already $50 instead of the usual $5. Nice, right?

But when the price drops by the same 5%, your loss will be $50. And your deposit will evaporate. Because losses are also multiplied by 10.

Where to use leverage

Futures are perpetual contracts where you bet on the rise or fall. Margin is when you borrow spot crypto and trade with it. Both schemes prey on their victims.

Why this is dangerous

Liquidation is the scariest word in the vocabulary of a margin trader. The market moved differently than you expected, and the exchange closed your position at a loss. Your balance = 0. Often even faster than you realize what happened.

Cryptocurrency volatility adds fuel to the fire. When an asset can drop by 20% in an hour — trading with leverage becomes Russian roulette.

Survival Rule

Experienced traders work with leverage of 2-3x at most. Beginners? Forget about leverage for the first year. Trade spot, learn to read charts, understand the market. When you feel that you can predict movements for two to three weeks — then maybe.

And always set stop-losses. Always. This is not advice, this is a prayer.

Leverage can earn you easily. But it can also spend your money more easily. The choice is yours.