The volatile crypto market highlights the risks of trading with leverage | Crypto

The volatile crypto market highlights the risks of trading with leverage

– The use of leverage in cryptocurrency trading can lead to significant losses during market downturns.
– Leveraged trading of cryptocurrencies is risky due to the volatile nature of the market.
– Billionaire investor Mike Novogratz recently acknowledged that he underestimated the amount of leverage in the market and the losses that this would bring.
– KoinBasket Founder and CEO Khaleelulla Baig stated that many crypto traders have poor risk management skills, especially when it comes to limiting losses.
– The fall of the Three Arrows Capital (3AC) hedge fund was partially due to the use of leverage.
– The Celsius crypto lending firm is also reported to have collapsed partly due to the use of leverage.
– Some jurisdictions, such as the European Union, have already drafted rules to be imposed on the crypto sector, which will reduce instances of overleverage.
– U.S. regulators have been more aggressive when it comes to clamping down on crypto brokers offering margin trading.
– Major crypto exchanges around the world are beginning to limit leverage in order to avoid regulatory discordance with major jurisdictions.

The volatile crypto market highlights the risks of trading with leverage

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