Kraken unleashes 20x bitcoin leverage: What traders need to know

01:00 Speaker A

you know, this is that same thing like that means at 20 X a 5% move on Bitcoin gets you liquidated.

01:09 Speaker A

You're gone. Your money is gone, right? An unlevered investor can survive a large decline.

01:14 Speaker A

You can just wait until price comes back, but if you are using leverage, 20 X leverage specifically in this case, you can be liquidated during a normal intraday move, even if you're right and Bitcoin ends up going the way of your bet.

01:25 Speaker A

Leverage is very, very dangerous. Now,

01:28 Speaker A

there are reasons to use leverage because it reduces counterparty risk. You can basically, you know, gamble with 20 X or invest or hedge or whatever you want to call it with more money leaving less money on the actual exchange and then you don't have the counterparty risk of your money or your keys being your coins being on exchanges, which is very important.

01:43 Speaker A

I would just say that these are instruments that should be solely used by professionals and that retail probably should not be using 100 X leverage on perps and 20 X leverage on their spot trading accounts. This is insane.