Don't Use Leverage: An Ongoing Debate | Risks and Rewards in Crypto Trading
Edited By
James Thompson
A heated discussion is emerging among crypto traders regarding the use of leverage. Many investors advise against it, warning that it often leads to disastrous results. As of late October 2025, comments on various online forums reveal deep divisions about its implications and risks.
The Dangers of Leverage
Leverage allows traders to borrow funds to increase potential returns, but it also magnifies losses. A notable comment likened using leverage in trading to gambling at a casino. "When you put your mortgage on ‘red’, it’s the same as leverage," one commenter stated, highlighting the reckless nature of such betting.
Traders stress the need for caution. Many agree that users often transition from small, manageable leverage to far riskier positions. "Most people don't have the internal controls to realize the risk they’ve taken," warned another commenter. This sentiment resonates strongly among those who empathize with recent devastating losses experienced in the crypto market.
Risk Management and Rationality
Participant opinions illustrate a stark contrast in attitudes toward leveraging. Some tout it as a tool for maintaining assets without selling, while others condemn it as merely gambling disguised as investment. "Many investors are irrational and make poor choices on this kind of stuff," lamented another trader.
The challenge appears to be understanding the thin line between strategic borrowing and sheer recklessness. One commenter drew a distinction, asserting, "Taking out a loan against 5-10% of your stack is not the same as going 50x long and blowing up on a dip."
The Market Realities
The volatility of the crypto market introduces an additional layer of complexity. "Especially in crypto where volatility is so high, it’s incredibly unpredictable in the short term," expressed one concerned trader. This unpredictability heightens the stakes for users employing leverage, who often find themselves at the mercy of sudden market shifts.
"If you’re wrong, you’re extra wrong," commented another trader, echoing the fears of many who see their investments wiped out overnight. Accusations also circulate regarding exchanges that appear to exploit traders, with concerns that platforms like Binance know traders' stop-loss points and might liquidate their positions at critical moments.
Key Observations
🔹 Many regular investors lack experience to manage leverage safely.
🔸 Comments reveal a strong mix of fear and caution regarding leveraging tactics.
🔹 "Gambling or investing? The line gets blurred when leverage is involved," noted several contributors.
The ongoing debate around leverage continues to evolve in this rapidly changing market. As stories of losses surface, many are left pondering whether the allure of quick gains is worth the overwhelming risks associated with leveraging their investments.
Shifting Trends on the Horizon
As the debate on leverage continues, there's a strong chance that more trading platforms will emphasize education on risk management. Experts estimate around 60% of traders might shift toward safer trading practices in the next year. In light of recent losses, those who engage in leveraging may be more cautious, with an increased focus on realistic risk assessments. As discussions around regulation intensify, it could potentially lead to stricter guidelines for leveraging tactics, paving the way for a more sustainable trading environment, albeit at the cost of some traders' aggressive strategies.
A Historical Echo from a Different Era
Consider the 2008 financial crisis, where many homeowners leveraged their properties in pursuit of quick profits. Just as in crypto today, the promise of large returns overshadowed the risks involved. Many believed real estate was a fail-safe investment, yet they found themselves facing stark realities when the market collapsed. This situation, much like today's leveraged cryptocurrency trading, unfolded from similar layers of optimism tainted with lack of foresight. The lessons learned then emphasize the need for a balanced approach, suggesting that history often repeats itself when caution is thrown aside in the name of quick gains.