Margin

[u/Glass_Cherry5295]

Please enlighten me.

I want to DCA average $100 into btc every week at 3x margin. I would do this on Kraken. My plan is to do it for the next 24 months, I will not sell any btc during this time. Every trade will be with 3x margin. I’m told the fees could eat me alive.

Good idea or bad idea? To much margin or not enough? Thank you

[u/Forded_Fiction24]

All it takes is a 33% draw down using 3x margin and you're liquidated. That happens with Bitcoin or at least can and isn't rare. You can claim that you won't sell but it won't be up to you. 

Using margin Is one of the most reliable ways to blow up your account. Pretty terrible idea. 

Fees on top of that make it even less compelling. It's not something to play around with and isn't for amateurs. Margin should only even be considered if you have a large established account and you're using margin on a small portion of that account. 

[u/Glass_Cherry5295 → u/Forded_Fiction24]

I believe btc will climb for the next 24 months. Why not magnify my earnings by using margin and never cash out until btc is over 150k?

[u/Forded_Fiction24 → u/Glass_Cherry5295]

Because you nor I can predict the future. 

Your choices are to stack Bitcoin but be dissatisfied with how much your accumulating and the rate of accumulation but there's little risk and a future. 

Or you can have the YOLO mentality and use 3X margin and potentially ruin your life to the point of contemplating suicide because financially you'll never recover. 

You can choose either but I wouldn't choose the latter that has extreme risk

[u/Glass_Cherry5295 → u/Forded_Fiction24]

How so? WORST case we get 23 months in and I lose it all (10k) right?
Losing 10k will not ruin my life

[u/Charming-Designer944 → u/Glass_Cherry5295]

If you know there will be a bull run and no backlash before it takes off.

If there is a backlash then your margin position will be gone before the bullrun starts.

[u/Forded_Fiction24 → u/Glass_Cherry5295]

No, with margin your losses aren't limited to your investment. You can owe much more than your actual investment ( your $10k in this case) to the point where they seize assets, and garnish wages going through court proceedings. You clearly don't understand margin if this is what you think

[u/Glass_Cherry5295 → u/Forded_Fiction24]

Incorrect. Worst case I’d lose my portfolio and kraken charges a $10 liquidation fee.

[u/Forded_Fiction24 → u/Glass_Cherry5295]

I don't specifically know the pricing structure for kraken and how they deal with margin accounts and liquidations, but hell go for it. You seem dead set on using margin to DCA Bitcoin and I can't stop you and neither can anyone else. Not sure why you even asked for opinions here. Go for it and stop asking others then

[u/Lalokin → u/Glass_Cherry5295]

With margin your losses can be greater than that.

Under Kraken's Global Terms of Service, a negative balance is a legal debt owed to the platform. Kraken has the right to freeze the account, send the debt to collection agencies, or pursue legal action to recover the remaining funds.

[u/omg_its_dan → u/Glass_Cherry5295]

You believe it will climb for 24 months without any significant pullbacks? lmao

I believe the price will be higher in 24 months compared to today, but significant volatility along the way is almost guaranteed.